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This report entails the details for the methods being used to conduct the research and to reach a conclusion and findings for the prevailing research problem of employee turnover in Nishat Apparel Division. It starts with an overview of company and its operations, global & domestic overview and the overall textile industry overview. It also incorporates the competitor analysis of the company. This report explains the Textile industry scenario of Pakistan and its growth prospective such that what are the government policies and regulations for this sector, if they exist. Competitor analysis is done while considering two competitors that is, Masood Apparel Ltd and sapphire textiles Ltd.
Literature Review has been done from various journals, articles and published articles. Firstly, the textile industry is explained, then the Human Resource Management is taken into consideration which is the area of interest and then the research problem is discussed through articles.
Furthermore, the Research question along with the research methodology including the sample size, variables regarding the research problem, research design and limitations of the research are presented. The findings and Analysis on the primary research is discussed in detail which mainly purports to the basic research. All the factors and reasons leading to employee turnover in this particular firm are mentioned which leads to the overall analysis of the research and findings. The results being mentioned are from all the sources that were useful in conducting this research.
In the end, Conclusion and recommendations is given along with the sample of questionnaire being used to get the opinion of employees of Nishat Apparel Division.
COMPANY PROFILE
NISHAT GROUP
Nishat Mills is a public limited company that comes under the domain of Nishat Group. It was incepted in 1948 by Mansha’s father Mian Mohammad and his three brothers and is one of the top five business houses in Pakistan. The group’s journey started plausibly but cascaded down the road of success to earn the existing dynamic reputation, over the years, under the legendary leadership of Mian Mohammad Mansha. The group has spread its roots in almost all leading sectors of economy and by far is the most eminent player in every sector, it operates in. It has no parallel when it comes to comparison in terms of diversification with other groups. Its exalted position is narrated by the presence of following companies under the group’s flagship.
SECTOR
COMPANY
Textile
Nishat Mills
Insurance
Adam Jee and Security General
Banking
MCB
Construction (Cement)
D.G. Khan Cement
Power Generation
Pakgen Power Limited
Paper Products
Nishat Shoaiba Paper Mills
Aviation
Phonix Aviation
Source: Nishat Mills Limited Company Website; www.nishatmillsltd.com (2012)
Although all these companies are acclaimed but the three prominent among them are Nishat Mills, MCB and D.G Khan Cement. The group is renowned as a multinational operating locally, with products, services and management skills superior to all other competitors. Currently, Nishat comprises of 21 companies out of which 13 are listed with manufacturing assets worth Rs. 27 billion. Nishat Textile Mills was established in 1951 where as first power unit was set up in 1995 by the group. Muslim commercial Bank was acquired in 1991 and now has over 1200 branches with more than 12000 employees. Nishat Group has been the largest exporter of textile products from Pakistan since a decade with total exports of Rs.36.015 billion in the year 2011.
INTRODUCTION
NISHAT TEXTILE MILLS
Nishat Mills is the largest vertically integrated textile company in Pakistan. It is one of the largest manufacturers and exporters of textiles. It primarily exports fabric to American and European countries where it is used by acclaimed brands such as GAP, DKNY, Tommy Hilfiger, Old Navy, CHAPS, and Sears etc. It employs latest technology from Europe, Japan and USA and obtains synergies from local companies when it’s a necessity for them to outsource the raw material or yarn. The capacity for large scale production is met with 198,120 spindles, 670 air jet looms and finishing capacity of 7 million meters fabric per year. The company is equipped with latest dyeing and processing units including 2 stitching units for home textile, 1 stitching unit for garments and power generation facilities of 89 MW. The progress and expansion of Nishat Textile Mills over the years is shown in the table:
Source: Nishat Mills Limited Company Website; www.nishatmillsltd.com (2012)
Over the past decades, the company climbed the ladder of success under a dedicated and motivated management team. The vision and mission statements were rephrased several times but they revolved around the same objective of serving the customers and country.
MISSION STATEMENT
“To provide quality products to customers and explore new markets to promote/expand sales of the Company through good governance and foster a sound and dynamic team, so as to achieve optimum prices of products of the Company for sustainable and equitable growth and prosperity of the Company”.
VISION STATEMENT
“To transform the Company into a modern and dynamic yarn, cloth and processed cloth and finished product manufacturing Company that is fully equipped to play a meaningful role on sustainable basis in the economy of Pakistan. To transform the Company into a modern and dynamic power generating Company that is fully equipped to play a meaningful role on sustainable basis in the economy of Pakistan”.
AWARDS AND CERTIFICATIONS
Under the banner of Nishat Group and due to the relentless efforts of the management team, Nishat Mills attained following milestones.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Export Performance Trophy
ISO-9001 certification
IKO-TEX 100 certification
SA-8000 certification
City pad certification
MEMBERSHIPS
Nishat Mills Limited is a member company of the following Industry Associations and Trade Bodies:
All Pakistan Textile Mills Association (APTMA)
All Pakistan Bed sheets & Upholstery Manufacturers Association (APBUMA)
Pakistan Readymade Garments Manufacturers and Export Association (PRGMEA)
Pakistan Textiles Exporters Association (PTEA)
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
The Lahore Chamber of Commerce and Industry (LCCI)
Karachi Chamber of Commerce and Industry (KCCI)
The Faisalabad Chamber of Commerce and Industry (FCCI)
NISHAT APPAREL LIMITED
Nishat Apparel was incorporated in 2005 as a public limited company. The company is equipped with state of art plant and equipment for handling all kinds of Woven Bottom made ups. Nishat’s decades of experience in the textile industry sets Nishat Apparel firmly above its competitors for its dedication towards quality and efficiency. Now Nishat apparel is a leading manufacturer and exporter to all the World’s major brands of Woven Bottoms.
Mr. Faisal Naseem, director operations is looking after Nishat Apparel. Nishat Apparel brings a blend of dedication and commitment towards its customers. This is achieved by offering premium services ranging from thread and fabric selections to the manufacturing of the products and providing the best quality to its customers on their demands.
VISION
People at Nishat Apparel are committed:
“To do what is right, to be a good neighbor and partner in their community, to conduct their business with an environment friendly manner, to provide fair return to society, employees and stake holders, and to conduct business with employee, customers, suppliers and all other based on honest, fair and equitable basis”.
DEPARTMENTS & PROCESS FLOW
DEPARTMENTS & PROCESS FLOW AT NISHAT APPAREL
GATE OFFICE
Gate office mainly controls the flow of materials that enter into and out of the factory. Without their permission, no materials enter into the factory and no department accepts any material without the entry stamp from the main gate. The remaining process takes place afterwards.
OGP stands for Outward Gate Pass and IGP stands for Inward Gate Pass. Gate Office basically verifies the OGP. Then Receipt room is there to verify each and everything by looking both the various components. Here, purchase order is received which consists of all details.
They handle internal control procedures in company transfer system (non-returnable materials) like donation, transfer, credit, cash and loan.
Gate office has the responsibility to completely verify the item; if they don’t give the permission the security will not clear that item. First there is demand and then Purchase order. It includes Challan Invoice. Invoice details are being verified against the PO number. If purchase order is written then it is entered immediately. In case, it is not written then via email this is informed to concerned department and is again sent to the gate office so that they can actually put their stamp on it. And that PO number can be generated. Entry of both fabric and components take place which go to fabric room and to the receipt room, respectively.
After they assign IGP (inward gate pass) number, second procedure is to assign GIN (good inspection note) number.
The gate office has the authority both to sample and check one by one the quantity of goods. When they approved the item against purchase order, the software automatically generate IGP number, which they write on documents and sent to the receipt department. Cartons by suppliers go directly to the receipt room.
There is no specific number of deliveries. If sometimes the delivery does not match then it is kept by gate office and is kept pending, unless and until the concerned department responds. And the concerned department sometimes takes too long.OGP is of two types that is, Returnable and Non – Returnable. Payment adjustment and documentation start with gate office and outgoing items end with gate office and documentation done from it.
RECEIPT ROOM
First physical inspection of inward material is received and IGP is generated by the Gate Office. The three documents being received are Invoice, Delivery Challan and Packing List with material. Physical Inspection may result into following outcomes: Excess, Shortfall, and Rejection.
In case of Excess: the items become property of GNA and are sent to store room. For Shortfall: Receipt Room intimates concerned department and also the supplier and the IGP is sent back to the Gate Office for correction. And for Rejection: Receipt Room holds the goods and intimates concerned department which verifies and guides the receipt room for acceptance or simply sending the material back to the supplier. OGP is then generated by the store room, in case; the items have to be sent back to the supplier. On acceptance, GRN number is generated, GRN stands for goods received and inspection note. All GRNs are collected by store room and concerned department. Signed IGP will be sent back to the Gate Office who is responsible for signatures required on the form.
PROBLEMS
Counting very small items with large number takes a lot of time in Quality Inspection, for example, Tags which need to be counted on a weight scale also needs to be checked for Bar Code, Line number and Size written on it.
STORE ROOM
In this particular department, materials like thread, zip, buttons and many other required things needed to make a garment are held in an inventory form. It provides each and everything related to making of a final product starting from a fabric to a needle. Main store department provides the accessories and fabric department provides the fabric to the cutting section. Basically merchant passes demand for coding which is by size, shade and tex wise. After coding the same demand goes to the purchaser and then purchaser purchases from the concerned supplier.
The order follows as: The material which came from the supplier regarding the purchase orders and other items which are used in the factory get approve at the gate and the gate office provide the IGP (Inward gate pass) number.
After approval from the gate office the material is sent to the receipt section in which they check the quantity of materials which they require for the order and then quality inspector from the MMC check the quality of materials. Afterwards, GRN number is assigned to the inventory and then the materials are sent to the inventory store.
The staff, present in the store room takes the material from the receipt section to the main store and then they check the quantity and place the materials in the shelves. And then all the information regarding the inventory is entered into the computer concerning mentioned specifications.
In order to issue the material, SIR is required from production department and that SIR is signed by both who receive the material and who issue the material. SIR stands for “Store Issue Request” and it includes the item codes, description, location and quantity. Before issuing the material to specific department, all details are checked from the computer regarding the demand from the specific department and then material is issued to that concerned department.
In this particular department complete record is kept for convenience. Also, check and balance takes place monthly in order to remain up to date about the material being stored as an inventory and the remaining being issued to other departments. Every item has its own GRN. According to this GRN, Demand is fulfilled such as demand of threads, zippers, buttons, etc. Thread’s thickness is checked according to tex that can be 40, 27, etc. Lastly, finishing and packing takes place and for this there is a separate store named as “Basement Store”.
MATERIAL, MANAGEMENT & CONTROL DEPARTMENT
When the customer books order, it is the marketing department that provides all details. All specifications and requirements of trims and other things are provided in the form of the demand.
PPIC raises demand to the Material, Management & Control (MMC) department. MMC department physically deals with the supplier and purchase the materials according to requirement of the order. MMC is done for the material procurement like fabrics and accessories. Trims are referred to as accessories.
MMC accessories deals with supplier regarding the materials used in the garments except fabric like threads, zip, labels, tag, washing label, hangers, button, rivets etc.
If the customer is giving nomination and a code or a PI that is, purchase invoice, then it is the duty of MMC department to check and verify all the rates listed on that. After the verification of the prices and the codes, an order is placed.
In Nishat Apparel, lead times regarding the foreign countries is 14 to 16 days. Whenever the document has to be received, it is first given to the gate office, then to receipt room and from there to the warehouse. GNM is generated and then each piece arrives for an approval. If code is written on it then it is an easy task to simply check that. In case, the code is not written on it then the packing is checked as usually the codes are written on the packs. Also, if any problem arises during the audit or any other process then the sole responsibility is on the customer.
MMC fabric deals with supplier regarding the fabrics about how much quantity they need for the completion of the order and also what quality the customer desires. Nominated Supplier is the one who is bound to buy from the buyer supplier. Whereas, Non- nominated Supplier is the one who can purchase or collect fabrics from anywhere but the quality match according to the customer requirement.
PRODUCT DEVELOPMENT DEPARTMENT
Primary objective of PD is to establish a set up to understand the designs of products and make it easier to understand for production people. Two types of approaches are used at PD: Reactive and Proactive.
Reactive approach has nothing to do with marketing research regarding new fashion and upcoming designs. Client himself does this research and provides the design as a tech pack and PD only copies that design on behalf of the client. Proactive approach involves self designing and then taking those designs to international exhibitions and get orders from different clients. Here, the unit shows its capacity and research work which makes the client’s life easier if they like the designs and PD can make profits for the company by its work.
For this purpose, PD studies the last 4 to 5 years trends and customer’s related market segments to analyze and design according to the customer’s taste. PD is just like a factory within a factory. They develop samples, raise demands for their required materials, develop commercial samples and then take them to international exhibitions. PD interacts with marketing, PPIC, and Production to run its business.
Product development has different sections: Technical services, Design Cell and Sampling. Technical services department maintains four types of documents: Manufacturing Specs, Trim Cards (Both pre wash and after wash but all Pre cuts), Trim Issuance Sheet and Fabric Card.
Manufacturing Specs includes: Style Brief, Fabric and Wash Detail, Trim and sundries details, Thread and construction detail.
Sequence of Operations is very important for an assembly line and if it is changed very frequently then production cost increases tremendously. It is mentioned in the thread and construction details within manufacturing specs. It is considered very important and is an individual document which is not linked with any other document.
Fabric card and trim card as obvious from the names has the cutting of fabric and all the trims including pre wash and after wash are fixed as a sample record.
Fabric selection is also very critical both for body and pocketing. Designers start their working from a rigid cloth and take samples as leg panels are leg tubes for washing, stitching, embroidery etc. Almost 70-80 articles are prepared every year. These designs are then presented in different exhibitions internationally and customers pick designs of their choice and place orders. In this way design cell brings business to Nishat Apparel and contribute in profits. Sampling is just like a small production house where commercial samples are prepared. These samples are very important for winning the orders therefore it has been kept separate from bulk production house so that attention to details can be paid.
CUTTING DEPARTMENT
Nishat Apparel is well equipped to handle the complete cycle with state-of-the-art machinery and experienced teams handling each and every detail of process in production. Currently the manufacturing capacity is 600,000 garments per month.
Software being used to design markers for automatic or manual cutting is four Gerber Spreader Machines, capable of spreading eight layers of fabric in a lay, two Gerber high speed heavy duty automatic cutting machines, and two Gerber plotters for printing the cutting markers.
The cutting department mainly aims at quality control and minimizing wastage. Cutting is divided into three basic areas that are spreading, cutting and binding.
The cutting department spread the fabrics according to the size chart and Fid report. They prepare the size chart of the fabric, their sizes, width and shrinkage. The spread is of same length. And according to the length of fabrics all the details are fed on to the spreading machine.
For shrinkage purpose they add some margin in length. Below the fabric on the spreading machine, they have punching papers that have holes within it. After spreading, the fabric is moved through pressure machines to the cutting department. In every piece cut, there is front panel, back panel, single fly, double fly, front pocket bag, 2 belts, loops, 2 yokes, coin pocket and other major things.
SEWING DEPARTMENT
Currently, there are 22 sewing lines with 65 machines in each of the line totaling 1430 machines. A normal eight hour production shift is capable of preparing 30,000Pcs/Shift/Per day. There are 4 sections in sewing section. They are Back section, Front section, Assembly 1 and Assembly 2. Quality inspector at the end of the assembly checks the quality. Leather patch and then WIP passes the garments to the washing section and they wash the garments according to customer requirement. After leather patch WIP count the pieces and then sent them into the washing section. There are different types of machines and threads which are used in stitching to perform the operations such as, Lock machine and Chain machine.
Tex of the thread and stitches per length is decided by product development. Tex is basically a standard of measurement of thickness of thread. They use 40 Tex, 60 Tex, 105 Tex and 80 Tex for the finest quality and for strength.
INDUSTRIAL ENGINEERING DEPARTMENT
Two types of costing sheets are sent to this department by the marketing department namely, Sketch and Sample. In sketch sheet, pictures and some other minor details are represented whereas; in sample there are no pictures. IE department gives information such as, estimate of how much meter of garments is required and how much minutes are required to complete the assigned task. This is done with the help of SMV which is “Standard Minute Value”.
The main aim of this department is to reduce the unnecessary time of the garment and also to suggest an easy method for the bulk production. Hence, an accurate and correct assumption is given by them. This department does its work in collaboration with the marketing department. This department prepares a sheet known as “Operation Breakdown Sheet”. Here, SMV is calculated operation wise and target per hour in accordance to machine.
Activity sampling method is used for the calculation of productivity and non-productivity time. There are total 22 lines each having 65 machines with extra 16 helpers in total. Total working hours defined for the labor is 8 hours a day.
IE is actually helping production line. By doing the time study, production study and capacity study, the problems can be identified. And if there are any bottlenecks then IE is there to solve it. At the same time, weekly efficiency report is prepared by this department. Therefore it can be stated that IE suggests which operations are suitable and which are not and calculates consumption and layout sequence.
GARMENT WET PROCESS (GWP) DEPARTMENT
At Nishat Apparel, GWP performs various tasks, including finishing washes and fabric trimming. There are both washing machines and dryers. Washing section is basically the technical department which add the effects and shading in garment. Garments are prepared for sampling, add the effects if required and sent to the respective department. The samples are prepared for the approval from the customers and if the samples are approved by the customer then they prepare the bulk quantity of the garment.
Scrapping and all other effects are done before washing and all chemicals are used separately. 3 times wash is required for DENIM garment and 1 time wash for TWILL. For DENIM dying 2-3 hours are required and for TWILL 45 minutes are required for dying. And 3% error is acceptable all over the factory.
While the following washes are available in a variety of possible combinations. The types of washes available in Nishat Apparel are as follows: Enzyme washing, Bleach wash, Over dyeing (direct dyeing), Garment Dyeing, Garment wash (Rinse + Softener wash), Tinting, and by washes (acid enzymes).
PRODUCTION, PLANNING, IMPLEMENTATION & CONTROL DEPARTMENT
The production planning and control department plays a vital role in the massive operations of Nishat Apparel. Their forecasting and scheduling skills Help in determining the production specifications which are devised to satisfy the expectation and demands of our clients completely.
Placement and planning of the material is done by PPIC. PPIC prepare all plan regarding the flow of materials from feeding to finishing section. It receives information from the merchandiser and link it the production.
The PPIC department links with the FID (Fabric Inspection Department), CAD (Computer Aided Design) for making the marker, Cutting (issuing fabric), WIP (work in process) PPIC sub department, IE department, Sewing Department, Quality Assurance Department, GWP (Garment Wet Process), Finishing (trimming, button, zip, pressing) and Packing area (dispatching).
Customer tells the order to the marketing department and then marketing department asks PPIC whether this order can be taken or not. PPIC then looks for the capacity and if it is more the order can be taken otherwise not. Afterwards marketing department negotiates with the respective customer.
After the confirmation of the orders, meaning that induction date and the ex-factory dates get decided, the procurement gets started and PPIC plans about the percentage at which the material requirement is planned.
If shipment date gets delayed due to any reason, it is the sole responsibility of the PPIC department. Therefore, it is there to implement and control as well. PPIC is actually monitoring the balancing.
Work in Process (WIP) is there for controlling. Sometimes the order is delivered on time but even then the problem arises. This might be due to the reason that the material is defected. So, here PPIC plays the major role by raising the shipment alarm. If the other party negotiates well then its better otherwise the company has to bear a loss. This is very rare but again PPIC will be responsible. For a planner to achieve success it is very important to know: “What is going wrong?” & “What can go wrong?”
FINISHING, PACKING & SHIPPING
In tag section, tags and label are attached to the garments. Washing labels are then attached and extra buttons are included. This is ensured that the garments are packed properly and free of any flaws or defects. Even the possibility of minute needle fragment in the garments is not overlooked; every garment is magnetically scanned through the needle detector. Again, if it is the demand from the customer only then it is passed through the needle detector, otherwise, there is as such no need.
In the non-needle zone area, the shade master separates the garments according to the shading and sizes. There is buyer scanning software available. Through bar code they enter the quantity of garments. After that, the material is packed in the Polly bags and then the garments are placed in the cartons.
There is also the customer auditor in the packing section who checks the quality of materials by selecting random packing box. After approval, the garments are ready to be dispatched. Now the order is ready to be shipped.
ORGANIZATIONAL STRUCTURE OF NISHAT APPAREL LIMITED
Source: Nishat Apparel Limited: Human Resource Department
FLOW CHART OF MATERIALS TO FINISHED GOODS
LITERATURE REVIEW
LITERATURE REVIEW
Mariappan. V & Chidambaram. K (2003) in their article have done a survey of the benefit exhibition of the National Textile Corporation in Tamil Nadu and Pondicherry showing an exasperating picture of downtrodden limit utilisation, old fashioned engineering and machinery, poor support and overabundance human power. It has been shown here that the textile division is an unpredictable industry and measuring the gainfulness of the textile industry is a perplexing task. There are different sorts of assets, which are not inter-convertible and are utilized in the processing of textile features. Therefore, productivity in textiles could be measured as far as any of the assets utilized. Study of capacity utilization of the corporation and the installed capacity of the spinning and weaving has been undertaken by the authors as a methodology to reach a conclusion.
“Productivity is getting drained mainly due to underutilization of machines, inefficient working, poor machinery maintenance, over spinning, lack of modernisation, power shortage and unhealthy labour and management relations”.
Ganesh. S (2002) in his article has identified that the Indian textile industry is in a state of rot, if viewed from the point of view of readiness for the opening of the globe textile business sector in 2005. The cotton ginning has a poor quality and wastage of spinning takes place due to which imports are descending. As a consequence, the costs increase. The Indian textile industry is excessively divided and outdated to profit from the business openings which will follow the end of portion controls. At the same time trading units are helpless in the event that they are denied of right to gain entrance to the residential business.
Patibandla. M & Chandra. P (1998) in their journal have explained the inter-firm variations in the adoption of different organizational practices and labour productivity on the basis of various factors such as screening, benefit-imparting, flexibility in working hours, productivity by a team, just in time and the size of the firm based on the primary survey taken from the Canadian Textile Industry. The outcomes infer that screening and benefit-imparting are substitutes. Benefit-imparting rehearse has all the marks of being more successful in little firms than vast firms. Information from 62 firms was gathered by the authors throughout 1992-1993 by means of a post survey that was caught up by conversations with plant administrators for about 30% of the firms. Other than this, various different variables have been defined by the authors for this particular study and the production function framework has been used to find out the results.
Harpaz. I & Meshoulam. I (2010) in their paper have written about the implication of work, occupation relations, and strategic human assets administration. This paper demonstrates that Israeli specialists working in textile firms have ended up being more individualistic and materialistic, and less aggregately turned. The mentioned issues clearly impact job relations and organizational strategies. Subsequently, it focuses on strategic human assets administration centres on the move of Israel’s textile mills Human Resources calling, from the accepted HR part to the revamped Strategic Human Resource Management part. The three major influential changes and their impact on the Human Resources Profession being mentioned are the growth and development of the high technology industry, globalization, and the strategic movement.
“High technology industry brought with it an additional important change – an emphasis on innovation. Creating an environment of innovation required a new managerial approach and new HRM emphasis. Empowerment, flexibility, collaboration, better use of employees’ collective wisdom and less formal structures is just a few of the basics in developing and encouraging innovation”.
“The area of HR measurement is ignored, to a large extent, by Israeli managers. Tools are not developed, expertise is minimal and management does not demand it as an integral part of the business. Very few organizations have implemented holistic, systematic measurement methodologies, such as the HR Scorecard”.
Tanveer.Y, et al. (2011) in their journal The Way Human Resource Man
