Kohinoor Textile Marketing Analysis 9n30

ACKNOWLEDGEMENT ‘‘In the name of Allah most merciful and beneficent’’ “We raise in degree of rank whom so ever we pleased; and our every pressure of knowledge is one, most knowing”. (Al-Quran) we are very thankful to ALLAH Almighty who gave us the opportunity, courage and confidence to explore more knowledge to complete this project and for His (ALLAH) blessings that have brightened every part of our life, and our parents whose prayers always ed us in every task of our life. While working on this project, we were guided by our experience, knowledge and interest in the subject ‘‘corporate information system”. Beyond of all the material available I am very thankful to my respected and honorable resource person “MR NAUMAN ALI” for giving us such knowledge about the subject that make ‘‘corporate information system ’’ a very motivating subject. This become possible only due to his very unique style of teaching we ever experienced during our academics life. And through his motivational behavior we are able to complete this complex task. Besides this we would like to thank our senior who showed their kind concern toward the completion of this final project of “corporate information system’’.

WAQAS BIN ILYAS NOOR-UL-WADOOD FAZLI RAZA AKBAR

SHAHZADA KAMRAN

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EXECUTIVE SUMMARY Today is the era of Information System and it is playing a vital role in a good organization. It helps organizations to create a competitive advantage with a unique feature that gain attraction of customers. It helps to reduce time and risk factor. This project is about analysis and development strategy of Kohinoor Textile Mills. We analyze their current IT strategy that is use in different functional areas. Each of these functional areas plays a role at different levels like as operational, managerial and executive levels. We discuss the information needs of Kohinoor at these different levels. After analysis needs of each functional area we suggest the new idea of new IT strategy and option that are very necessary for them to reduce time and risk factors and create a competitive advantage and give the suggestion to implement and manage the change for the new IT strategy. The system which we have proposed “ERP” will satisfy the requirements and needs of the company. It enabled all departments to coordinate with each other (financial, marketing, production, sales and ment departments, services). By using this new proposed system Kohinoor will gain the leadership and can over come on the threats and weaknesses. This information system will enhance the efficiency and quality of work of Kohinoor. The executives of the company can easily get the information to prioritize the important projects. This information system will provide a good coordination with suppliers and customers.

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Problem statement Kohinoor is already using an information system named as K-NET. Kohinoor use its internal network K-NET to best utilize its manufacturing resources. For this purpose production planning and control department directly linked with marketing department and store department. They can only see the information available on the links of departments and receive or send order specification manually. They use K-NET as their financial information system to check out expenses of each department of the factory and then set budget for each department. But they don’t consider projects requirements when they make decision of budgeting. Kohinoor textile mill use its information system to meet the internal needs and they just improve local performance. Their suppliers and customers can not interact with them directly.

BUSINESS PURPOSE OF THE COMPANY Mission Statement At Kohinoor we aim to serve the needs of our customers and build value for our stake holders by continuing to remain an efficient and profitable company. At the same time we hope we are creating an environment where talented and exceptional people want to work. We are committed to providing our employees with opportunities for personal and professional growth that they can find nowhere else. We are dedicated to operating

our

facilities

with

the

utmost

respect

communities and environment in which we live and work.

for

the

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Brief History Founded in the early 1950s in Pakistan, Kohinoor is a dynamic and efficient manufacturing company. We aim to be the preferred partner of business in all of the markets we serve by anticipating the needs of our customers and building value for our stakeholders. KTML was established in 1953 at Rawalpindi and is one of the oldest companies of Pakistan with over 50 years experience in textile manufacturing. It was initially set up as a spinning and weaving project with 25,000 spindles and 600 looms. However, after decades of aggressive expansion and modernization KTML has emerged into a fully vertically integrated home textiles company with state of the art capabilities for spinning, weaving, dyeing, printing and stitching. The company has a diverse customer base with sales in both the local and export markets. The main international markets include Asia, Europe, USA and Australia. Past and present performance When they started the business they have only spinning and weaving project with 25,000 spindles and 600 looms. Today they are a pioneer of the textile industry and their buyers are Levi’s, Gap and Dockers .Kohinoor textile mills dye cloth exports for roughly 20% of Pakistani dye cloth exports. The Firm has been exporting to the USA, Europe and Asian countries for many years, and has only recently started to export to India. Last year annual report shows the 9 month total sale is Rs4, 584,952 (in 000). And the share price of Kohinoor textile mills is Rs30.65. the total share holders of Kohinoor textile mill are 5,120. Kohinoor profit

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and loss shows the export of the company increase day by day.

Structure analysis Management of Kohinoor Maple Leaf group Kohinoor maple leaf group structure starts with the Tariq Sayeed Saigol chairman of the Kohinoor Maple Leaf Group. After the chairman Taufique Sayeed Saigol is the CEO Kohinoor Textiles Mills (KTML). After CEO, Mr Usman Said Director of Finance for the Kohinoor Maple Leaf Group than Sayeed Saigol is the Chief Executive of Maple Leaf Cement. Sayeed Saigol is the Chief Executive of Maple Leaf Cement, Waleed Saigol is the Managing Director of Kohinoor Raiwind Mills, and Jahanara Saigol is the Director for Corporate Strategy. Zamiruddin Azar has been actively involved in various corporate activities of the Kohinoor Maple Leaf group. As a non-executive director, he heads the Internal Audit Committees of the group companies, after the top level management director of the each department, Then GM of all departments. After the GM level than comes the middle level management of each department. Then comes the managers of each department, and then comes first line managers (foreman) and at the end of the labors.

Strategic Vision We at Kohinoor Maple Leaf group manufacture and market different types of high quality of product according to the

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demanding

requirement

of

the

customer’s

national

and

international level. Our strategy is to be competitive in the market through quality and efficient operation. As a responsible member of the community, we are committed to save the interest of all stakeholders and contribute towards the prosperity of the country.

INFORMATION NEEDS OF THE COMPANY Operational Needs Employee attendance system Kohinoor

textile

has

used

digitalized

attendance

system.

Employee has their own attendance card. They can used them when they enter or exit in the factory, and their working time automatically counted by this system. This system can help in payroll

and

HRM

system

to

evaluate

the

employee’s

performance. Payroll processing Kohinoor

has

a

digital

payroll

processing

system

with

collaboration of union bank. Employee has a special for their salary and they can take their salary through ATM cards that are issued by the organization. Employee’s skill inventory Kohinoor used its internal network system called K-NET to assess their employees according to their work interest. On one side especially first line manager directly link with employees to evaluate the motivation and interest in work; on the other side

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HRM information system has a complete information on K-NET. First line mangers directly put information to whom they want to train and educate regarding in work into the K-NET. Manufacturing resource utilization Kohinoor use its internal network K-NET to best utilize its manufacturing resources. For this purpose production planning and

control

department

directly

linked

with

marketing

department and store department. They can only see the information available on the links of departments and receive or send order specification manually. Pricing and sales analysis Take an order and requirements of the customer and use the KNET system for pricing, forecasting, distribution of product. They put information like order size, order processing time and per unit cost, it will give best option of prices offered to customer.

Managerial Needs Order processing Marketing department place complete information of new orders and s department obtain this information using K-NET to make decision by using ing techniques like job cost sheet about order. Financial forecasting It’s very important for Kohinoor to forecast each its department on semiannually or annually basis. They use K-NET as their financial information system to check out expenses of each

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department of the factory and then set budget for each department. But they don’t consider projects requirements when they make decision of budgeting. Compensation analysis HRM department uses K-NET to keep information about every employee of the organization regarding their benefits, salary package current work level and job description. And use this information when make decisions about any employee. Inventory management Managers can use ORACALE based K-NET system that provided the facilities to managers to control manage and analyze the inventory in stock, work in process and finished goods. They just put information in the software but there is no option for other department to update information automatically according to their requirements.

Strategic Needs Ratio analysis Kohinoor s department use K-NET to make monthly quarterly and annual financial reports that helps executives to analyze how much liabilities are covered by assets. K-NET gives only reports they calculate ratios through manual system. Portfolio analysis Kohinoor financial department take only reports from each department and units of Kohinoor Textile Mills Limited and make

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decision on the basis of their Return on Investment. K-NET cannot provide any option that shows any alarming situation to executives to prioritize the projects.

Personal forecasting Kohinoor use its K-NET for personal forecasting like recruiting, hiring, education and training, benefits management, employees’ termination and work force planning. Advertising and promotion planning Kohinoor marketing department use its K-NET for their internal use and can not help them to make decision of market research analysis and promotional planning on the basis K-NET results. Manufacturing resource planning Managers produce monthly reports for strategic planning of manufacturing through K-NET. It gives only information for their planning; there is need of software that shows the complete requirements and best utilization of resources of orders. • APPENDIX 1 shows the structure functional area needs.

ANALYSIS Industry analysis

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External environment Political environment Political environment has a strong influence on Kohinoor textile mills. In Pakistan no political stability, the government it self and the laws changes day after day. Another factor Pakistan is a Muslim country and little activity of terrorism can affect the customer’s interest to give orders or invest in the Pakistan. The customers feel risk in placing orders. That’s why they shift their orders to another countries like as India, Bangladesh. Economical factors Due to political and economical instability, the country is suffering in inflationary condition. This can affect the sales of the products. The economic conditions of Pakistan have worsened from past few years. Economical environment also influence the Kohinoor textile mills. The increasing inflation rate can cause the increase in per unit cost of product. That’s why other countries have edge because stable economic policies. And they attract customers because of low cost and same quality. Pakistan is a developing country and unemployment is a major issue of the country that’s why labor and material for production is costly competitively with other countries. Social- Culture Social culture is changing day by day in Pakistan as well as in the whole world. Pakistan is a developing country and Kohinoor Textiles target market is foreign countries, the perception of people of these countries is Pakistani’s can not adopt the health

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or other quality standards creates a negative impact on Pakistan made products. Life style patterns and fashion are indirectly effect the Kohinoor but it directly affects the brands. Technology environment Technology is the important part for every organization for their competitive

advantage.

Kohinoor

textile

mills

use

a

new

technology compare as competitors. Kohinoor reduce the cost by using new technology and make quality products. Kohinoor technology offer a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc.

COMPETITIVE FORCES ANALYSIS Threats of new entrance There is always a barrier for Kohinoor Textiles if new company enters in the market with new technology. Threats of substitute There is no threat of substitute because other textile mills offer the same products. Bargaining power of buyers The bargaining power of buyers is very high because there are so many textile mills that provide the same products and services, like sapphire, Denim jeans, Nishat choonian and Gullastan.

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Bargaining power of suppliers The bargaining power of suppliers is very low because there are so many suppliers are available in the market to take raw material for production and other equipment. Competitive intensity The competitive intensity is very high because there are so many competitors are in the market like sapphire, Denim jeans, Nashat choonian and Gullastan.

Opportunities and Threats Kohinoor have its own energy setup for their textile mills. Also they provide electricity to WAPDA. Kohinoor avail the opportunity of getting orders of Levis top brands banana republic and meet the needs of their standers. Kohinoor had a threat from international market like India, Bangladesh and Srilanka. The textile industry of these countries have a edge of low labor and material cost, and flexible Government policies that’s why they offered low prices for the same products. COMPANY ANALYSIS Strengths and Weaknesses Kohinoor use latest technology with respect to their competitors. And have a qualified staff. Kohinoor have strength to take big orders from the top brands all around the world. With the increase of their production level Kohinoor Energy can not meet

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the needs of Kohinoor Textile mills. They have no expert system to make effective decision in difficult situations

Environmental factors

Suppliers

Social Demographics shifts

Economic Macroeconomi c conditions

Culture Strategic Consumer Grid Matrix changes income

Organization Marketing department Other departments Employees

Technological Changing technology Technology impact on customer value

Suppliers

Competitive Alternative forms of competition Components of competition

Kohinoor textile mill use its information system to meet the

Regulatory Laws protecting competition Laws affecting marketing mix Self regulation

internal needs and they just improve local performance. Their suppliers and customers can not interact with them directly. This situation shows the use IT and their each functional level. But IT has a low impact on strategic decision making Value Chain Analysis The value chain analysis is a systematic approach to examine the development of competitor advantage. This chain comprises of a series of activities that create and build value. The organization is divided into primary activities and activities. The value chain analysis of Kohinoor Textile Mills is as follows.

Primary activities

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Inbound logistic They purchase a raw material from different sites of the country. The store department checks inventory level through K- Net to determine how much raw material is required for production. Kohinoor suppliers have no online ordering system that’s why Kohinoor use telecommunication for placing orders. Kohinoor textile mills have own a few number of truck. If they purchase a raw material in huge capacity then they used the rental good transport.

Operations The development operations of Kohinoor are carried out in a systematic manner. Initially the customer’s requirements are received at Kohinoor and a contract is made with the customer through marketing department. The production planning and control (PPC) team makes a comprehensive plan that includes cost & time estimation, resource allocation and risk analysis. After the approval of this plan, the production is started Quality assurance activities are performed before delivering the product to the customer. Outbound Logistics After complete the production, finished goods are transferred to store department or directly to the customer. Complete information of finished goods is available at K-NET and assessable by each department of the organization.

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Marketing and Sales However, in the growing market where competition has increased the importance of marketing has also increased. So Kohinoor textiles market its products and take orders mostly from foreign countries by participating in the national exhibition of these countries. And also their products through internet and take orders. Services After sale services are clearly defined at the time when Kohinoor take orders from the customers. If after sale services are decided at that time than Kohinoor provide these services other wise Kohinoor is not liable for any loss or damage of the product. The customers and the agreements clear that the organization is liable ing activities Procurement is very important at Kohinoor because customers want product delivery at decided time, if the order is late due to procurement than it is necessary to courier it through air that is very costly for the organization. It must be purchased as possible as low price with high quality. Technology is important source of competitive advantage. Kohinoor use latest technology in the operations of each department. They use intranet called K-NET with in the organization and it cover all the areas of the organization. Human resource management is one of the main ing activities in any organization. Human resource

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management system at Kohinoor is very sound and they have complete information about their employees and have compensation and benefit policies.

DEVELOPING THE IT STRATEGY AND OPTIONS (Proposing system) Kohinoor use the IT in the functional areas of Production, Marketing, HRM, Finance and s department. They use Oracle base application called K-Net that links each department with another. But they have some limitation with this K-Net software. We develop a new strategy for them by adding more value in this existing strategy. In Kohinoor textile mill actual work start from the marketing department and marketing department use K-Net for their internal use at operational level for pricing and sale analysis, if they develop another application that is assessable by the customers and this application shows a variety of options and customers are able to choose the best option and place orders according their own requirements. They just put data and analyze their self is it beneficial for them or not with respect to other organization. These options helps to Kohinoor for new product development, and the web hosting that helps Kohinoor textile mills for product location analysis and to choose their target customers. Behind the marketing department production planning and control department, also require Application that helps them how much inventory they require for production for orders and best

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utilization of resources that minimize the risk of time and wastage of resources. Also guide them for cost and quality tracking, customer’s problems and services tracking. It helps to reduce the production time and give accurate result. There is another area for improvement is to directly link Production department link with store department through IT. In the existing system they can only see the inventory in store department. When they receive a new order then they tells more material

or

inventory.

If

marketing

production

and

store

department are directly links together through Application that automatically determines how much raw material is required when order is placed by customer and automatically check the inventory level if it is not sufficient for production of order then generates a report of items that are not available in the inventory for production. It helps production department to make the products with in the time limit. Another functional area is Finance department. Its role is very important when marketing department accepts the orders from customers. Kohinoor textile mills use its K-Net only for cash management and can not use in financial forecasting and portfolio management at the time when they take orders. There is gap between time of taking orders and start working. Here is need of application just help them to determine how much capital is required for each department for specific order from customer and

automatically

manage

the

cash

for

all

departments.

Specifically it helps to managers to set budget for each department at the time when they take orders from the

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customers. And help full for executives which type of order is more feasible for them or not. And which order they prefer. Kohinoor textile mills used its K- Net at department for payroll processing and orders processing but they need ratio analysis system at executive level. This application is very simple but gives very accurate results, which are very valuables for decision making. The other strategy is very important for Kohinoor textile mill is Customer Relation Management because Kohinoor have a strong competition at national and international level. Customer relation management is a very important for Kohinoor to create a strong relation with their customers and also helps the marketing department to search the new markets, customers and helpful for new product development. In true meaning of IT strategy for Kohinoor textile mills is that, they need enterprise recourse planning software. It attempts to integrate all departments and functions across Kohinoor textile mills onto a single computer system that can serve all those different departments particulars needs. It takes a customers orders at marketing departments and check the information necessary to complete the orders, (customers credits rating and order history from the finance

department, the

company

inventory levels from the warehouse module, production capacity from production planning and control department, and then the shipping trucking schedule from the logistic module. COMPETITIVE OPTION

ANALYSIS

OF

THE

ALTERNATIVE

AND

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We develop the IT strategy of Kohinoor textile mills according to their functional areas and it is necessary for each department to create links within departments. And the options describe in the above section are an addition in the existing system and is very important for the organization. Enterprise resource planning is flexible enough that they install some modules without buying the whole package. ERP is very simple and efficient way to control and manage each department comparatively implemented the information system separately in the each department. In ERP finance did its job, the where house did its job marketing and production and planning department did there jobs. It started with the customers credits rating from the finance department, and then check product inventory level from the where house. And examine will the customers pay on time, will they able to ship the orders on time? These types of decision are helpful for customer’s services representatives. Different departments see all the information and can up date it. When one department finishes the order, it is automatically routed via the ERP system to the next department. Each department uses the same software and solves the problems related to their departments. ERP helps the marketing department to integrate customers order information. It tells where the order lives from the time customer’s services representative receive it until the loading dock ships the merchandise and finance sends an invoice. It keeps track of orders more easily and coordinate manufacturing, inventory and shipping among many different locations at the same time.

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It also boosts up manufacturing process. ERP system came with standers methods for automating some of the steps of a manufacturing process. By using a single integrated. Computer systems can save time and increase productivity. It can lead to reduce the inventories of the material used in production and it can better plan deliveries to the customers. Customer Relation Management Comparatively a customer’s relation management is best way of competitive advantage and Kohinoor has a strong competition at national and international level. The use of Customer Relation Management software helps to make a strong relation with customers and their satisfaction through their at Kohinoor Textiles. It a part of enterprises resource planning that handle the up front selling process. STRATEGIC IMPLEMENTATION AND CONTROL MECHANISMS (AN ACTION PLAN) Tactical plan Kohinoor textile mill tactical plan are implemented in its each functional area. Tactical plans at production and operation are to manage and control the inventory level of production, cost and quality tracking material and resource planning at least for three month. System used for market research and analysis, product location analysis and promoting ments in these specific locations. System use for recruiting, hiring, employee training and benefit management according to the organizational needs. System

use

for

managing,

controlling

and

auditing

the

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customer’s credit rating and budgeting of future six months for each department.

Operational Plans Operational plans are managing day-to-day operations. It means the best utilizations of manufacturing resources at production module daily analysis of the sale and pricing at marketing departments, managing employee skills inventory and their attitude at work, their personal requirements, allocations and management of cash in each departments and the payroll processing system at ing and finance department.

Portfolio Management Enterprise Resource Planning software activity manages the portfolio of the Kohinoor Textile. It is very critical situation for Kohinoor Textile to drop a project or order in the middle stage. ERP helps them when they make a deal with customers, it check the customers past history and credit rating and on the other side check; will they have production capacity to meet the needs and the standers of the customers, and will they be able to ship the order on time? Will the order beneficial for them or not? All this information helps to make a decision, which project or order is reliable and beneficial for them. When working starts ERP involve in monitoring projects at frequent interval by making monthly reports, and the general managers get these monthly financial and work process report from their departments and then

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analyze the project status, and make a decision to prioritize their projects to satisfy their customer needs and create a competitive edge among the competitors.

Change Management It is too hard to manage the change in any organization, but now its era of information system and it is necessary for every organization to change themselves according to the new standers, and IT is playing an important role for competitive advantage. The Kohinoor Textile Mills is an old and popular organization in the textile industry they use the latest technology and have an educated staff. The implementation of a new information system is not a big problem for them but they need training for their employees for accurate use of this software. To manage the change the training of employees who uses this new system is must. During the implementation of this system minimum two software engineers are necessary for each department who guide employees for the accurate use of new system.

Requirements for Enterprise Resource Planner (Hardware and Software) Hardware Requirements  Server  Coaxial cable  LAN Cards

22            

Hard discs Combo drives Hubs Monitors RAM 1GB UPS speakers Printers Scanners Key board Mouse Modem

Software Requirements  Operating system (Windows XP professional 2006)  Internet explorer 6.1 or higher  Oracle

Budget Hardware components

Units

Cost/unit (RS.)

Cost (RS )

Server

1

25000

25000

Scanner

1

4000

4000

Monitor LG 505G 17”

1

6000

6000

1

4500

4500

RAM 1 GB

1

2000

2000

Combo drive

1

2500

2500

Hard disk

23 Printer Hp LaserJet 1015

1

7000

7000

Coaxial cable

100 feet

45/ foot

4500

Keyboard

1

200

200

Mouse

1

100

100

UPS

1

5500

5500

Modem 56K

1

1500

1500

LAN card

1

1200

1200

Speakers 56K

1

2600

2600

Total

RS 66,600

Software Software Components

Units

Cost/uni t RS

Cost RS

Oracle

1

3000

3000

Window XP Advance Server Internet Explorer 6.1

1

3500

3500

1

500

500

Total

RS.70 00

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CONCLUSION Kohinoor used its information system software K-Net to improve their local performance. It just helps them to gain and maintain information at each functional area. Each department only sees the information of other departments but can not integrate with others departments through K-Net software. That’s why every month they ship their 2 or 3 orders through air, which is very costly for them. It is because of the time management and it increases the risk factors. If Kohinoor textile mills use the enterprise resource planning software, then it helps them to combine all functional are together into a single integrated software program that runs of a single database. So that the various departments can more easily share information and communicate with each other. It also helps to prioritize the project and also play a role to handle the upfront selling process.

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Post mortem: In this project of corporate information system we have learned a lot about the needs and requirements of the corporate sector in latest technology and competitive edge. The course was so much beneficial for us to build our concepts in regards of corporate information system. The project was a very nice experience for us all because it showed us how to respond the trend of latest technology being adopted these days in the corporate sector in Pakistan. Last and not the least, we are updated about information system, after learning this subject and after doing this project of Kohinoor limited.

REFRENCES www.kmlg.com www.lse.com www.google.com BOOK: information systems today By Leonard Jessup

26 Joseph valacich

APPENDIX 1