PERFORMANCE APPRAISAL OF SMALL SCALE INDUSTRY: A CASE STUDY ON THE --- PICKLE INDUSTRY

Authors : Tania ,Sowmya Students St.Agnes College

IntroductionIn Indian economy small-scale and cottage industries occupy an important place, because of their employment potential and their contribution to total industrial output and exports. Government of India has taken a number of steps to promote these small industries. However, with the recent measures, small-scale and cottage industries are facing both internal competition as well as external competition. There is no clear distinction between small-scale and cottage industries.

Objective of studyTo find out about the financial operations

of the industryTo learn about the credit facilities obtained

by them to start a home industryTo find out about the awareness among the

owners of the industry about the credit facilities provided by the govt.

To obtain information about the short- term credit facilities given by the suppliers

To acquire information about how the finance has been used by the industry

To gather information about their future plans on expansion of the industry and the credit facility that they would be adopting

To calculate the finance required to set up the same industry in other region

To learn about how profitable has been the operations of the industry and their creditability to repay any credits or debts.

Research MethodologyThe collection of primary data for

the present study is from the interviews with the owners and supervisors of the -----Pickle Industry. The researcher visited the industry and gathered the information.

Secondary data was used for the further detailed study

Industry ProfileTender mango, Piece mango, Lemon,

Mixed veg, Plum hog pickle, Keeralu Ambade, Dodli Ambade,Lime Roasted,Chilli roasted ,Kanchi,Mango in Oil with garlic (special and popular product) and many more.

Average market price for all the products of --- pickles is 240rs. Per kg. Depending upon the region the price varies.

The Distribution Chain

Manufacturers Retailers Consumers

The products are sold directly to the retailers to be sold to the final consumers. There is an absence of middle men or a whole seller in the distribution channel and therefore distribution cost is low.

Working Conditions

Payment/place Industry Distribution

Paid Workers 2 -

Unpaid workers(owners)

3 1

Working hours ; 8-9 hours a dayTotal number of workers : 6Salary to workers : 7000/month

Cost sheet units 40kgs

Particulars Rs. Rs.Raw materialsChilliMustard seedsOther ingredients Carriage inwardMango

 30014040015900

 

Prime CostAdd; Factory o/hWages 2 workers ElectricityDepreciation on machinery Depreciation on building

 

  466151.3111.5

1755     483.611

Works costAdd; selling o/hPackagingDistribution cost

  28040

2223.611  320

Total costprofit

  2543.6111056.389

Sales   3600

Selling EffortsSelected buyers of the product have a good will for the product and therefore no need for special selling efforts.

Supplier’s relationship-----industry has maintained a very good relationship with their suppliers, and the suppliers provide them with a short term credit facility of 10 days to 30days.

FindingsHousing loan it self is used for the construction of

the industryAn additional Loan taken for the purchase of new

machinery and no commercial purpose loan was given.

High profitable industry and therefore no requirement of credit facility

The profit is not being reserved for the purpose of future expansion

The owners are unaware of the credit facilities given by the govt.

Healthy relationship with the suppliers has resulted in short term credit facility benefits

Future expansion policies are not given any consideration and no fund is reserved

Financial accounts are not at all maintained

Informal way of maintaining the books of account

Difficulty in differentiating the personal cost with that of the factory expenses

SuggestionsMaintenance of double entry system of

books of accountThe owners should not include personal

expenses to the factory expensesMaking use of govt. schemes for the

expansion Reserving an amount of money for future

needsAffiliate with other industriesSpend on selling effortsWiden the channel of distribution.To widen their product line.

Conclusion-----Pickle Industry should research about the small scale industry benefits and schemes granted by the govt. and use it to their advantage. They should reserve a portion of their income for the future expansion and credit. They should undertake marketing to create demand among the potential customers and acquire a greater market share. The small-scale industries sector plays a vital role in the growth of the country. It contributes almost 40% of the gross industrial value added in the Indian economy.

Referencehttp://dcmsme.gov.in/

http://www.dcmsme.gov.in/ssiindia/performance.htm