1) INDUSTRY PROFILE:

The textile industry (known colloquially in the United Kingdom and Australia as the rag trade) is

a term used for industries primarily concerned with the design or manufacture of clothing as well

as distribution and use of textiles.

Textile industry is one of the largest and oldest industries in India. It has a significant role in

India as it fulfills the essential and basic need of people. Textile industry in India stands at

unique place and has maintained a sustainable growth over the years. This is a self- reliant and

independent industry and has great diversification and versatility.

Textile industry represents the rich culture, tradition, heritage and economic well-being of

country with diversified range and versatility. At the same time industries competitive enough to

fulfill different demand patterns of domestic and global markets.

Indian textile industry contributes about 14% to industrial production, 4% to the country’s Gross

domestic product (GDP) and 16.63% to export earnings. An export from over 40% of the

country’s total production of the textiles sector, the biggest employment generator after

agriculture sector and is expected to generate 12 million new jobs by 2010. The sector targets

US$ 6 billion foreign direct investments (FDI) by 2015 to be invested in green field units in

textiles machinery, fabric and garment manufacturing, as well as technical textiles.

India has made inroads into the markets of its key competitors which include Asian countries

such as Sri Lanka, Bangladesh, Vietnam and Cambodia. The Indian textile and apparel industry

is taking a new course by entering the Chinese market. Most of the top global apparel retailers

such as JC penny, Nautica, Docker and target, have their sourcing network in Indian textiles and

apparel exports, which is worth US$ 22 billion, is expected to register a four-fold increase to

touch US$ 90 to 100 billion in the next 25 years.

MAJOR PLAYERS IN THE INDUSTRY:

Raymond’s

Reliance textiles

Gokaldas

Shari exports

Arvin mills

K. Mohan exports and BSL limited.

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Indian textile industry can be divided into several segments, some of which can be listed as below:

Cotton Textiles Silk Textiles

Woolen Textiles

Readymade Garments

Hand-crafted Textiles

Jute and Coir

Current Facts on India Textile Industry

India retained its position as world’s second highest cotton producer.

Acreage under cotton reduced about 1% during 2008-09.

The productivity of cotton which was growing up over the years has decreased in 2008-09.

Substantial increase of Minimum Support Prices (MSPs).

Cotton exports couldn't pick up owing to disparity in domestic and international cotton prices.

Imports of cotton were limited to shortage in supply of Extra Long staple cottons

Government Initiative:

The Government has announced the release of a subsidy of US$ 533.87 million for the textile industry under the Technology Upgradation Fund scheme (TUFs). The government extends 10 per cent capital subsidy and 5 per cent interest subsidy on installation of machineries and for processing machinery under the TUFS. A 41-member Working Group has also been announced to be set up with a National Fiber Policy, to ensure self-sufficiency in fiber consumption and export requirements in India.

The garment industry in India is one of the best in the world. An extremely well organized sector, garment manufacturers, exporters, suppliers, stockiest and wholesalers are the gateway to an extremely enterprising clothing

The garments industry in India is one of the best in the world. An extremely well organized

sector, garment manufacturers, exporters, suppliers, stockiest and wholesalers are the gateway to

an extremely enterprising clothing and apparel industry in India. There are numerous garments

exporters, garments manufacturers; readymade garments exporters etc. both in the small scale as 2

Today, garments exports from India have made inroads into the international market for their

durability, quality and beauty. One of the reasons for the economical pricing of India's

readymade garments and apparels is the availability of highly skilled, cheap labor in the country.

The superiority of India's Garment Industry has been acknowledged in the National Textile

Policy (NTP) of India 2000. Having realized the tremendous growth potential of this sector there

is a proposal in the NTP for taking the Indian Garment Industry out of the SSI reservation list.

Commenting on the transaction Rajendra Hinduja said, "With its global reach and deep

relationships, Blackstone is an ideal partner to help us realize our vision of building a global

industry leader." Mr. Hinduja added, "Blackstone is a long-term partner and intends to work with

us to deepen our customer relationships and accelerate our growth plan. With Blackstone's

relationships across the world, our customer profile is likely to get a significant impetus.

Mr. Akhil Gupta, Chairman and Managing Director, Blackstone Advisors India Pvt. Ltd., said

"Gokaldas is the leading Company in India in an industry that has seen significant growth in the

Asian region post the elimination of the garment quota regime in 2005. This favourable industry

dynamic combined with our highest regard for the management team of Gokaldas Exports was

key factors in our decision to enter into this partnership. We are looking forward to using our

global network in contributing to the growth of the Company in a meaningful way."

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2) COMPANY PROFILE:

A) INCEPTION AND BACKGROUND

Gokaldas Exports was founded by the visionary Jhamandas H. Hinduja, who, with his innate

ability to plan for the future, while closely overseeing the details of day to day operations, built a

company with strong foundations and a corporate ethos that rewards initiative and innovation.

A QUICK OVERVIEW ABOUT GOKALDAS EXPORTS LIMITED:

1. Incorporated in 1979, based in Bengaluru (Bangalore), India

2. Recipients of highest awards in the segment, since 1980

3. One of India's largest manufacturer /exporters of readymade garments

4. 46 fully equipped, modern, manufacturing factories, all based in and around Bangalore

5. Specialists in manufacture of Outerwear, Blazers and Pants (Formal and Casuals), Shorts,

Shirts, Blouses, Denim Wear, Swim Wear, Active and Sports Wear

6. An ISO 9001:2008 Certified Company

7. Capacity to produce and export 3 million Woven & 1 million Knit apparel per month

8. 47,000 skilled & highly skilled employees

9. A fully fledged in-house design team creating and developing exciting collections each

season

10. Modern production facility

Fully integrated in-house screen design & development center with a capacity of

developing 100,000 garments a day

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Printing unit installed with state-of-the-art automatic machines A well oiled

Laundry, fully equipped with automatic machinery and has the processing

capacity of over 150,000 garments a day

Polyfill manufacturing plant with a production capacity of over 400,000 yards per

month, ranging between 40-360gsm

Highly sophisticated quilting unit equipped with computerized quilting machines

processing over 500,000 yards per month

Embroidery unit installed with 100 multi-head embroidery machines producing

appliqués, badges, simple and complex embroideries, fulfilling a requirement of

2,00,000 pieces per day

Elastic manufacturing unit - capacity of over 50,000 meters a day

Woven and Bungee Cord making unit capacity of 40,000 meters per day

Carton manufacturing unit

B) NATURE OF BUSINESS CARRIED:

The Gokaldas exports limited group catering to high fashion readymade garment manufacturing

for men, women and kids of all ages and sizes has been growing steadily over the last few years.

The company has the capacity of manufacturing 10000 garments per day in each unit.

Gokaldas exports core business is manufacturing of readymade garments and exporting to the

western countries from where the order is get from various buyers. Business with established

name in US. EU, Japan and Canada.

India based Gokaldas Exports was incorporated in 1979 and today has c. 47,000 employees in 46

state-of-the-art manufacturing facilities with a system capacity to produce and export 2.5 million

garments a month. Gokaldas produces highly customized apparel for leading US and European

brands, with strengths in fashion and in-house design. Gokaldas is listed in India on the Bombay

Stock Exchange (ticker symbol GOKALDAS) and the National Stock Exchange (ticker symbol

GOKEX).

Clients:

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Over the years, Gokaldas Exports has developed excellent relationships with global giants

in the world of fashion garments. Their trust has enabled the company to grow in revenue

and reputation.

Nike

Mexx

Reebok

Oxbow

Old Navy

GAP

Banana Republic

O'Neill

Champion

American Eagle Outfitters

Sears USA

Sears Canada

Macy's Merchandising Group

Diesel

H & M

Debenhams

Spykar

Puma

Pellestrom

Abercrombie & Fitch

Adidas

Chevignon

Columbia

Dockers

Gaastra

Guess

Hollister

Levi's

Miss Sixty

The Metro Group

French Connection

Dillard’s

Zara

Pall Mall

Talbots

Woodlands

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C) VISION:

To set a precedent in the global garment manufacturing industry through continuous innovation,

exceptional products, focused services and enhanced customer satisfaction.

MISSION:

Deliver on-time, every time, anywhere in the world.

Keep a sharp eye on product quality and put in all efforts to raise the bar..... Constantly.

Comply flawlessly with all statutory regulations required by our customers in any

country.

Augment and maintain a logistics infrastructure that adheres to the highest levels of

efficiency and seamlessly blends with our customers' own supply chain.

Ensure escalating productivity standards at the lowest operating cost, thus offering our

customers a product of the highest quality at the most competitive price.

QUALITY POLICIES:

Monitoring quality in obsession at Gokaldas exports. GEL has adopted a total quality

management system (TQM) program, kaizen. Kaizen bestows greater responsibility on

individuals within the labor force, thereby ensuring greater quality and productivity. Through its

unprecedented involvement in every step of the manufacturing process.

GEL Citations and Accolades:

A Gokaldas export limited is an ISO 9001:2008 company. Standards and design specifications

are replicated with fanatical care.

Industrial engineering team:

The team comprising of personnel trained in garment manufacturing technology maintains a

strict vigil on the quality. They inspect each style before it goes on to the production line,

examining every requirement from sewing to packing. An operation breakdown and machine

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specification list is prepared for each style. Ere, GEL in-house quality control department steps

in. A detailed pre-production meeting is carried out with each factory before the new style is

located on the lines.

Post production, the garment goes through several on-line, pre-final inspections that adhere to an

AQL of 2.5. This ensures that the product manufactured by GEL is world class.

Lean sigma:

Lean production is an assembly-line manufacturing methodology developed originally for

Toyota and the manufacture of automobiles. The goal of lean production is described as “To get

the right things to the right place at the right time, the first time, while minimizing waste

and being open to change”

The ten rules of lean production can be:

1. Eliminate waste

2. Minimize inventory

3. Maximize flow

4. Pull production from customer demand

5. Meet customer requirements

6. Do it right the first time

7. Empower workers

8. Design for rapid changeover

9. Partner with suppliers

10. Create a culture of continuous improvement

Gokaldas Exports Ltd. is now in the process of adopting the Lean Production Method

and Kaizen Promotion Teams are already in place and undergoing required training. These

teams are primarily responsible for implementing the Lean manufacturing process all across the

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manufacturing units to bring about the required results. This process involves going deeply into

the manufacturing activities and adopting holistic and sustainable approach that uses less of

everything to give us more.

D) PRODUCT PROFILE:

The difference between a regular and a leading apparel manufacturer is how strong or innovative

and successful its I.E. Department is. Appreciating this fact GEL has put in place a strong team

in all locations and engineers also present in each of their manufacturing facility.

The key role and responsibility of this department is:

PRODUCT EVELOPMENT PRE-PRODUCTION

PLANNING

PRODUCTION

IMPLEMENTATION

Product engineering Layout and m/c planning Work aids

Pattern engineering Operator training and skill

analysis

Time and motion study

Operation research Project planning Material flow

Products

1. Formal shirts 6. Undergarments

2. Formal pants 7. Frocks

3. Jeans 8. Blazer

4. Trousers 9. T-Shirts

5. Jackets 10. Ladies top

E) AREA OF OPERATION

Gokaldas exports conduct 95% of business Global wise. They do business in various countries

like US, EU, Canada and Japan. The organizational business accounts only 5% in regional wise.

Some Products are manufactured for domestic purpose if in bulk.

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The firm is operating its manufacturing units in three states in south viz., Karnataka (Bangalore

&Mysore), Andra Pradesh (Hyderabad) and Tamil Nadu (Chennai)

Registered Office:

122515, No.70, Mission Road

City- Bangalore

State- Karnataka

PIN-560027

Web Url-http://www.gokaldas exports.com

F) OWNNERSHIP PATTERN:

Holder's Name No of Shares % Share Holding

Promoters 6875202 20.00%

Other Companies

2562809 7.46%

Foreign NRI 20901 0.06%

Foreign Institutions

155734 0.45%

Others 68009 0.20%

N Banks Mutual Funds

10000 0.03%

General Public 914619 2.66%

Financial Institutions

299484 0.87%

Foreign Promoter

23469242 68.27%

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The chart showing the ownership pattern:

G) COMPETITORS:

Pahlavi export garments Aravind mills

DRSR export garments K. Mohan exports

Garden city fashion (p) ltd, Brigade exports Garments

Geetha export garments Bombay rayon fashions

Gokaldas images Jasmine apparels

Shai exports Jay International

H) NFRASTRUCTURAL FACILITIES:

IN-HOUSE FACILITIES:

DESIGN CENTRE: The new centre of Excellence has been created to cater to the needs

of the Design Team and of visiting designers. Envisaged as a space for creative process

and innovation, here designers feel completely at home, with ready access to all the

resources they need.

WASHING AND LAUNDRY: Key functions are all covered in-house. The state-of-the-

art Laundry division is fully equipped with automatic machinery with a processing

capacity of over 1, 50,000 garments a day!

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The Laundries are well equipped to handle all kinds of washes including bleach wash,

stone wash, chemicals and wash, acid wash, pigment wash, caustic wash, indigo wash,

softener wash and enzyme crack wash, and can also provide various desired effects on

fabrics like denim, etc.

POLYFILL MANUFACTURING: The polyfill manufacturing plant enables the

company to offer customized products to its clientele. It has a production capacity of over

30,000 meters of polyfill per day in a range of 40-360 gsm.

QUILTING: Quilting forms a very important part of the in-house facilities. This highly

sophisticated quilting unit is equipped with computerized quilting machines processing

over 30,000 meters a day.

PRINTING: The in-house Printing unit is equipped with 13 TAS spider Printing

machines and 9 printing tables, with a capacity to print up to 5, 00,000 pieces per month.

Sound planning facilitates smooth co-ordination between the production and the Printing

units.

EMBROIDERY: The past few years has seen resurgence in consumer demand for

embellishments. To cater to the specific demands of clients, Gokaldas Exports has

installed 100 multi-head embroidery machines. Appliqués, badges, simple and complex

embroideries are produced on these machines, fulfilling a requirement of more than 2,

00,000 pieces a day. Placing the company firmly amongst the world’s leading wholesale

suppliers of embroidered garments, including embroidered garments, including

embroidered ladies wear and men’s wear

ACCESSORIES: Various accessories such as woven and bungee cords, stoppers, tags,

cartons and other packing materials are all manufactured at the company owned facilities.

I) Awards and achievements:

AWARD AWARD BY GOVT. AND OTHER

INDIAN INSTITUTIONS

Successful execution during on-site NIKE12

development trips

Achievement award for outstanding export performance

Apparel export promotion council

Apex Golden scale trophy “The exporter of the year”

Highest exports award for Non-Quota market Confederation of Indian apparel exporters, Mumbai(Fifth international fashion award)

Best performance award Council of international awards

Highest exports award for Non-Quota market& silver trophy for Global exports

Clothing manufacturers association of India

Certificate of merit for outstanding exports performance

Clothing manufacturers association of India

Best exports award-Gold Govt. of Karnataka

Award for global exports and general currency area

Apparel export promotion council. Ministry of textiles govt. of India

Silver trophy for highest global exports Apparel export promotion council. Ministry of textiles govt. of India

J) WOKFLOW MODEL

Buyer visits chooses and place a order

Samples checked and sent to buyers for approval

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Quality and quantity check of fabric

Laying& cutting

Approv -ed

NO

YES

Buyer places order for his requirement

Collection of fabric/accessories from ware house /main stores/receive from supplier

Tagging, labeling, Final checking

Pre production sample approval

Packing and Dispatch

The workflow model of Gokaldas exports limited starts with the buyer’s intent to visit the showroom and places order and the approval for the same order is done through pre production approval. The collection of fabric against the material requisition slip and quality and quantity check of fabric is done at fabric department. Once the material is checked it passes to various departments which consist of inline quality assessment .Finally the finished products are checked and packed in the package department for order delivery and the same will be passed into warehouse.

K) FUTURE GROWTHS AND PROSPECTS:

Gokaldas exports lead keeping in mind the current market trends and the emerging requirements

all over the world. Therefore, they have chartered our growth plan accordingly. GEL has

streamlined manufacturing capabilities for mass production. GEL has integrated them with

automated manufacturing systems with ERP. A few of GEL group companies are 100% export

units with capabilities of mass production. They have the license to import duty-free fabrics and

accessories from all over the world for re-export.

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Suggested corrections incorporated; samples resubmitted if buyer insists

Marking and numbering

Sorting ,Sewing and Ironing

They are constantly striving to increase the capacity with backward integration & product

diversity

They have aggressive plans to double our knits capacity in 2 yrs

Plan of getting into Lingerie / Nightwear projects

Dedicated active wear units which specialize in Active / Sportswear is under process.

3) McKinsey’s 7S Framework:

The 7-s frame work of Mc-kensy`s is a management model that describes how one can

holistically and effectively organize a company. Together these factors determine the way in

which a corporation operates. Managers should take into account all seven of the factors to be

sure of successful implementation of a strategy- large or small. They are all independent, so if

you fail to pay proper attention to one of them, it can bring the others crashing down around you.

On top of that, the relative importance of each factor may vary over time.

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Those seven elements are distinguished in so called hard S’s and soft S’s. The hard elements are

feasible and easy to identify. They can be found in strategy statements, corporate plans,

organizational charts and other documentations. The 3’s across top of the model are described as

“Hard S’s”

Strategy: Thy direction and scope of the company over the long term.

Structure: The basic organization of the company, its departments, reporting lines, areas of

expertise and responsibility.

Systems: formal and informal procedures that govern everyday activities covering everything

from management information systems, through to the systems at the point of contact with the

customer

The 4’s across the bottom of the model are less tangible and more cultured and were termed as

soft S’s by Mc-Kensey

Skills: the capabilities and competencies that exist within the company what it does best.

Shared values: the values and beliefs of the company ultimately they guide employees towards

valued behavior

Staff: the people resources and how they are developed trained and motivated.

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Style: the leadership approach of top management and the company’s overall operating

approach.

SRUCTURE:

Board of directors

Director Sourcing and development

Director-Marketing& Imports

Director(Gen., admin,finance&logistics)

Director Marketing

Director Production

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Manager internal audit

Manager sampling production

Manager-LC payments& cargo clearance

Head of dept: Personnel

IT Managers

Various departments.

Asst. manager network admin

System analyst

Network admin

EDP assistants Programmers Support staff

Directors(sourcing and Development)

Manager(sourcing and Development)

Purchase manager Fabric

Manager fabric godown

Manager sampling

Manager sampling godown

Laboratory assistant

Purchase manager fabric

Fabric inspector

Merchandisers Assistants

Godown assistants

STRUCTURE:

Business needs to be organized in a specific form of shape that is generally referred to as

organizational structure. Organizations are structured in a variety of ways, dependent on their

objectives and culture. The structure of the company often dictates the way it operates and

performs. Traditionally, the businesses have been structured in a hierarchical way with several

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Purchase manager(accessories)

Production Coordinators

Quality control managers

Assistants

Manufacturing units

Quality controllers

F1 F2A F2B F3 F4

divisions and departments, each responsible for a specific task such as human resources

management, production or marketing. Many layers of management controlled the operations,

with each answerable to the upper layer of management.

VARIOUS DEPARTMENTS:

This is to know that the function of Gokaldas exports limited control has been clubbed for the

following department.

1. Marketing department

2. Finance department

3. Personnel department

4. Planning and control department

5. Production department

A) Merchandising department

B) Sampling department

C) CAD department

D) Cutting department

E) Sewing department

F) Quality department

G) Finishing department

H) Packaging department

MARKETING DEPARTMENT:

Products are well accepted in India as well as foreign markets and focusing more clearly

on the future to ensure long growth and leaping towards market leadership.

The objective of all economic activities is for the satisfaction of human needs. Marketing

is a process of planning and executing the conception, pricing, promotion and distribution

of ideas, goods and services to create exchange that satisfy individual and organizational

objectives.

Functions of marketing department:

1) Analyze various market opportunities and threats.

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2) Collect marketing information and anticipate to the demand.

3) Scan the marketing environment

4) Develop market richer strategies.

5) Sales promotion through advertising and maintain good public relations.

ACCOUNTS DEPARTMENT:

The department is playing vital role by providing and maintaining the entire details of

each and every financial activities of the company.

Functions:

1) To provide accurate and complete systematic information of financial activities.

2) To maintain all the books of accounts and other financial documents.

3) To prepare periodic financial statements of the company like P&L Account and Balance

sheet.

PERSONAL DEPARTMENT:

It is a branch of personal department (HRD). Time office is a key to personnel office. It

maintains the arrival and departure time of all the staff members including managerial

staffs. The workers are also requiring signing in the attendance register to avoid the mis

-representation or escaping trick of workers while going out of the department. The time

office sends these records to the personnel department. This records will help in wage

fixation, salary fixation, granting of leave and allowances to workers.

Salary administration:

There are skilled, semi-skilled and un -skilled workers in the organization and they are pay

according to ability and qualification and with consideration of government regulation.

Attendance:

The department records the time (i.e., the time of workers in and out of the company) through

punch card system write at the entrance by the time officer.

Employee’s data:

The personnel department keeps the records of employees.

Policies of HR department:

Child labor free:

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No child labor is engaged in any our unit, as they give more importance during childhood. They

motivate on compulsory education for children.

Involuntary labor:

They will not use any forced or involuntary labor, whether prison, bonded, indentured or

otherwise

Coercion and harassment:

In Gokaldas exports limited , they treat each employee with dignity and respect as among their

own family members , and will not use corporal punishment, threat of violence or other forms of

physical, sexual, Psychological or verbal harassment or abuse.

ESI and PF benefits:

All their employees of Gokaldas exports limited are covered under ESI and PF benefits, as a part

of social responsibilities.

Non discrimination:

Gokaldas exports limited will not discriminate in hiring employment practices, including salary,

benefits, advancement, discipline, termination or retirement, on the basis of race, religion, age,

nationality, social or ethnic origin, sexual orientation, gender, political opinion or disability.

Association:

GEL will respect the rights of employee to associate, organize and bargain collectively in a

lawful and peaceful manner, without penalty or interface.

Health and safety:

GEL provide employees with a safety and healthy work place in compliance with all applicable

laws and regulations, ensuring at a minimum reasonable access to purifier water and sanitation

facility, Electric shock preventer with the help of an automatic tripping switch system, lightening

the protector with adequate lightening and ventilation.

PLANNING AND CONTROLLING DEPARTMENT21

In co-ordinates and arranges for preventive and break down maintenance of machinery and

equipment. It identifies the needs of the training people at all levels of production planning and

control department and communications to management and information system and training

department.

The monthly machine shop requirement is worked out referring to procedure plan the plan for

material indent is done considering the following points.

1. Stock of components

2. Pending purchase order and indents as on the day

FUNCTIONS OF PPC

1. To organize material procurement, production, planning and periodic review with all

concerned heads. To plan for man power and equipment for production and control purposes. To

plan and organize the layouts of RPD and assembly for effective operations.

2. To co-ordinate and arrange for the prevention, break down and maintenance of machinery and

equipment. Conducting periodic meetings for continual improvements in quality of products by

giving guide lines at needed stages and finding out the requirements for training and functional

improvements for performance enhancement of workers. Conducting design review meetings,

non-conformance reviews meetings, customer complaints meeting and quality audits for finding

out solutions.

3. Keeping track of material requirements bases on various work order and inspecting and

controlling the flow of incoming materials, rejections and updating the records. To give drawing

requirements to design and development department and follow –up.

PRODUCTION DEPARTMENT:

A) MERCHANDISING

Merchandising department is one of the most important departments of any garment industry,

because it functions for getting orders from buyers. This department works as a link between

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buyer and manufacturer. They convey what the entire buyer expects from manufacturer. This

department plays a main role as communicator.

B) SAMPLING

Before actually making any samples, it is required to develop the patterns for it. The pattern

masters at GEL were equipped with expertise in the pattern making, evident by the fact that they

never required any mannequins for developing the patterns as per the measurements sent by the

buyer.

C) CAD

The best fit sample which has been approved by the buyer comes to the CAD department; here

GEL uses the Electra system. With the help of the digitizer the pattern is designed. Than the

minor adjustments which have to be made using Electra system.

D) CUTTING

Cutting room is one of the core areas in any garment organization. As a unit cutting room has a

greater effect on excessive manufacturing cost than any other department concerned with the

actual production of garments.

E) MATERIALS FROM STORE

According to the schedule fabric comes from store department to cutting department. Fabric is

issued in accordance with the style type, designated with a number, which is different for

different garments.

F) PATTERN PLACEMNT

The final step in the spreading is placing the marker on the lay. After the fabric is relaxed, the

marker planner is provided by the cad department, which mentions the lay width and length and

number of lays, efficiency, pattern placement and number of patterns.23

G) SEWING

The heart of garment unit is the department where the actual production takes place: sewing

department which is divided into batches. The sewing department has two quality inspection

wings.

1. In line checking

2. End line inspection

H) FINISHING

Finishing process is to check the garment for any defect and make them appealing through

pressing. Garments are checked according to quality system approved by a particular buyer.

I) PACKAGING:

The finished garments are packed in the cartons as per the packing plan. Each carton has

specified number of garments and the quantity can neither be increased nor be decreased after it

is planned.

SYSTEM:

Every organization has some systems or internal processes to support and implement the strategy and run day-to-day affairs. For example, a company may follow a particular process for recruitment. These processes are normally strictly followed and are designed to achieve maximum effectiveness. Traditionally the organizations have been following a bureaucratic-style process model where most decisions are taken at the higher management level and there are various and sometimes unnecessary requirements for a specific decision (e.g. procurement of daily use goods) to be taken. Increasingly, the organizations are simplifying and modernizing their process by innovation and use of new technology to make the decision-making process quicker.

Quality monitoring system:

Pre-production check:

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Risks are reduced by checking material components, accessories/ user manuals etc. at this stage

itself.

Fabric inspection:

The fabric is received from the warehouse whenever it’s required and it is checked for the 100%

quantity and 10% quality. The 10% 0f the total fabric received is checked for the quality using

Fabric inspection machine based on four points system.

The fabric is also checked for the shrinkage after it has been send for washing (Dry wash,

enzyme wash and chemical wash)

Initial production check:

First finished projects are checked against buyer’s specification and prototype sample.

Deviations are identified and brought out for correction.

During production check:

Inspection during production carried out to check and verify that the initial discrepancies have

been rectified and to ensure that the average quality standard of production runs

Inline pre-final& final inspection:

Final random inspection is carried out when the total consignment is packed and ready for

shipment. FRI is performed according to the International Inspection Standards.

The detailed physical inspection of the samples selected at random is based on specifications of

the buyers and it cover the criteria such as design/style, shrinkage, accessories, appearance,

markings, colour, labeling, material, assortments, workmanship, measurements and packing etc.,

7S AS APPLIED TO ARVIND MILLS

1. STRATEGY:

Their duties of being textile major Gokaldas exports ltd which has been recently going through a

bad patch owing to reducing exports and falling margins is undertaking a business

transformation in a bid to become a billion dollar company. The second criteria is Arvind ltd is

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now giving more focus to brands and retail which until now contributes 19% of total revenue. It

will also move to become an integrated textile player by producing fabric as well as retailing it.

Major emphasis would be on the value store format ‘Mega Mart’ which is targeted to achieve Rs

1000crore sales in 3yrs. Other than that Gokaldas exports plans to set up more formats by 2012.

The strategy may work out to be rewarding for the company as it has a good portfolio of

domestic and international, and has been a national player the move also helps it toward off any

risk it faces from the recession in exports markets.

2. STRUCTURE:

Gokaldas exports has adopted an organizational structure called the "Strategic Business Unit

structure" Under this structure, a company groups under one business unit, distinct product

groups comprise product groups targeted for distinct market segments and using distinctive

technologies in the manufacturing process. A company puts each business unit under the

command of a different person. The person heading a business unit is responsible for the

effective and efficient operation of the unit. This pattern of organization allows the company to

concentrate its energies on all the important business.

3. SYSTEMS:

All the systems used in the company, to get things done, also needed change to keep pace with

the changes in strategy and structure. These systems comprise performance appraisal and

counseling systems, compensation systems, other planning and monitoring systems. We have

thoroughly revamped all these systems to meet the new organizational demands.

4. SKILLS:

Company is good at the designs of apparel which go along with the recent trend it has passionate

young fashion designers with innovative skills who intend to give healthy competition

5. SHARED VALUES:

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Shared values refer to the same guiding values amongst the employees. It explains what does the

organization stand for and what it believes in. Its central beliefs and attitudes. It explains the

vision, mission and goals of the company.

6. STAFF:

They follow different methods for recruiting the staff and workers. Telephonic Interview is

followed for staff followed by meeting the heads of the branch. They follow a unique method to

recruit the workers. The production heads visit villages and motivate them to join and so there is

no process which the workers have to undergo. Motivation may find a way by providing

transportation facilities and frequent hikes.

7. STYLE:

There the leadership journey starts with setting a clear direction, gaining commitment and

aligning people, and ensuring passion driven execution in Gokaldas exports mills operations

4) SWOT ANALYSIS:

STRENGTH

Indian Textile Industry is an Independent & Self-Reliant industry. Abundant Raw Material availability that helps to control costs and reduces the lead-time

across the operation. Availability of Low Cost and Skilled Manpower provides competitive advantage to

company. Availability of large varieties of cotton fiber and has a fast growing synthetic fiber

industry. India has great advantage in Spinning Sector and has a presence in all process of

operation and value chain. Company has large and diversified segments that provide wide variety of products. Growing Economy and Potential Domestic and International Market Industry has Manufacturing Flexibility that helps to increase the productivity.

It contributes to the economic growth of the country.

Gokaldas exports limited are one of the largest apparel manufacturing companies in

India.

It has a work force of nearly 49000 people in all 45 units.

It works on customer specification, satisfying customer needs

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The company is meant for quality products

It has prompt delivery service and unflinching commitment to excel

The company is one of the major exporters of garments to the US, Japan, Canada, Europe

and Australia etc.,

The buyers of the company is having good brand name. (GAP, Old Navy, Mexx, Banana

republic, Lebek, Talbots, Zara, Nike, Adidas, Reebok, O’Neil and Spicer)

The Apparel Industry is one of largest foreign revenue contributor and holds 12% of the country’s total export.

WEAKNESSES

Indian Textile Industry is highly Fragmented Industry. Industry is highly dependent on Cotton. Lower Productivity in various segments. Lack of Technological Development that affect the productivity and other activities in

whole value chain. Infrastructural Bottlenecks and Efficiency such as, Transaction Time at Ports and

transportation time. Unfavorable labor Laws.

Attrition rate is high

Cost of maintenance is high

Most of the workers at subordinate level is not educated well

Sometimes it is difficult in getting proper output from all the units.

OPPORTUNITIES:

Growth rate of Domestic Textile Industry is 6-8% per annum.

Large, Potential Domestic and International Market.

Product development and Diversification to cater global needs.

Elimination of Quota Restriction leads to greater Market Development.

Market is gradually shifting towards Branded Readymade Garment.

Increased Disposable Income and Purchasing Power of Indian Customer opens New

Market Development.

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Emerging Retail Industry and Malls provide huge opportunities for the Apparel,

Handicraft and other segments of the industry.

Greater Investment and FDI opportunities are available.

As the company is established in three decades, it plays a major role in exports of the

garment.

The company can well establish itself in the international market

The company can issue further public shares to expand the business

After dismantling of quotas, India seems to benefit due to raw material, design skills and

skilled labor advantages.

India is the world’s third largest producer of cotton, second largest producer of cotton

yarn, third largest exporter of cotton fabric and fourth largest exporter of synthetic fabric.

With the establishment of training institutions like National Institute of Fashion

Technology (NIFT), many high quality designers, who are able to create modern designs

and interact with the buyers, are emerging. This is a distinctive advantage that Indian

companies have, and not yet exploited.

THREATS:

Competition from other developing countries, especially China.

Continuous Quality Improvement is need of the hour as there are different demand

patterns all over the world.

Elimination of Quota system will lead to fluctuations in Export Demand.

Threat for Traditional Market for Powerloom and Handloom Products and forcing them

for product diversification.

Geographical Disadvantages.

International labor and Environmental Laws.

To balance the demand and supply.

To make balance between price and quality

Appreciation of Rupee is also a major concern for the growth of the industry.

It is highly dependent on unskilled workers

More competition, enforcing the competitors to reduce their prices on their products

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5) FINANCIAL STATEMENT ANALYSIS:

March- 2009

(12 months)

March- 2008

(12 months)

Profitability Ratios%

Operating Profit Margin 11.55 8.13

Gross Profit Margin 8.61 5.09

Net Profit Margin 0 .28 4.43

Turnover ratios%

Inventory Turnover Ratio 2.73 2.62

Debtor Turnover Ratio 16.94 12.41

Fixed Asset Turnover

Ratio

3.05 2.94

Solvency ratios%

Current Ratio 5.94 5.06

Debt Equity Ratio 0 .82 0 .76

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Interest Covering Ratio 3.84 2.82

Performance Ratios%

Return On Investment 16.71 10.79

Return On Net worth 0 .75 10.54

Dividend Yield 0.00 8.44

Interpretation:

Profitability Ratios:

Operating profit margin:

Operating profit margin is calculated by dividing EBIT with that of the net sales. The operating

profit for the year 2007-2008, 2008-09 are 8.13% and 11.55%.It indicates the cost price

effectiveness of the organization

Gross profit margin:

As the gross profit is found by deducting cost of goods sold from the net sales, higher the gross

better the result. There are no standard norms for gross profit ratio. It is calculated to know the

trading profit made during the year. The gross profit margin for the year 2008, 2009 are 8.61%,

5.09% respectively.

Net profit margin:

The net profit ratio is calculated to know the actual profit of a concern during the year. The net

profit for the 2007-2008 and 2008-2009 are 0.28% and 4.43% respectively. Usually while

calculating the net profit the investment or capital of the firm is only in relation to sales.31

Turnover ratios:

Inventory turnover ratio:

The inventory/stock turnover ratio measures the activity or liquidity of inventory of the firm; the

speed with which inventory is sold. For 2007-2008, 2008-2009 the inventory turnover ratio is

2.62% and 2.73%. This means the inventory speed of converting into cash is increased when

compared to previous year.

Debtor turnover ratio:

It is the average amount of time needed to collect accounts receivable. Is is calculated by credit

sales divided by average debtors. For the year 2007-2008 the debtor turnover ratio is 12.41 times

and for 2008-2009 16.94 times hence the amount of time needed in 2009 decreased when

compared to previous year.

Fixed asset turnover ratio:

The standard or ideal fixed asset turnover is 5 times. The fixed asset turnover ratio for the year

2007-08, 2008-09 are 3.05 times and 2.94 times by this we conclude that the fixed asset turnover

ratio has been increased by 0.11 times for past one year.

Solvency ratios:

Current ratio:

The company`s current ratio for 2007-08, 2008-09 is 5.06, and 5.94 respectively. The standard

norm is 1:1.33. The current ratio for 2007-08, 2008-09 is above the standard norm. Hence we

conclude that the company enjoys sufficient liquidity and there is no shortage of working capital.

Debt equity ratio:

The standard ratio for the debt equity ratio is 2:1. If the debt is two times less than than the

equity, the logical conclusion is that the financial structure of the concern is sound and so the

stake or risk of the long-term creditors is relatively less. The debt-equity ratio during the last two

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years is increasing gradually which implies that the financial structure of the company is week

when compare to previous year.

Interest covering ratio:

This ratio measures the debt servicing capacity of a firm in so far fixed interest on long-term loan

is concerned. It is determined by dividing the operating profit before interest and tax by interest.

The interest covering ratio for the year 2007-2008, 2008-2009 are 2.82% and 3.84%.By this we

can conclude that the ability of firm in contractual interest payment is increased over a period of

time.

Performance Ratios:

Return on investment:

It indicates the overall effectiveness of the firm in generating profits with its available assets. The

return on investment for the year 2007-2008, 2008-2009 is 10.79% and 16.71% hence we can

say that the firm’s effectiveness in generating a profit is increased when compared to the

previous year.

Return on net worth:

Measures the return on the total equity funds of the ordinary share holders. It is calculated by

dividing net profit after taxes and preference dividend with average ordinary share holders. The

return on net worth is much lower than the previous year hence the firm is not efficient in

making proper return to the ordinary share holders.

Dividend yield:

It is calculated by dividend paid to the equity share holders divided by net profit belonging to

ordinary share holders. The dividend yield for the year 2007-2008, 2008-2009 is 8.44 and 0.00

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hence we can conclude that the dividends has not been declared for the year 2009 hence there

was low percentage to the return on net worth.

6) LEARNING EXPERIENCE

An Experience at Gokaldas exports Ltd was very productive. The opportunity itself made

me proud to have my project complete in Arvind Ltd. At Gokaldas exports Ltd the work

environment is so professional and friendly people with an attitude to help, they were co-

operative and informative about the project. This helped me analyze the data and

interpretation the statistical data. I learnt practical exposure at Gokaldas exports limited

towards the actual functioning of departments. I was able to learn about the various

strategies and systems followed which has given me much clear idea than what is read in

books. The production and supply procedures adopted at Gokaldas exports limited are

standard. However they may be modified to suit the specific needs of the organization, as

per the changing needs in the market. The organization provides good work culture and

better growth opportunities, which has attracted the prospective employees to apply for

its various positions. They also encourage the creative ideas of the young generation and

gives better opportunities to bring out the innate talent. Infrastructural facilities like

canteen facility, good working condition are provided. The management has succeeded in

effectively synchronizing the factors of production land, labor and capital. All department 34

of the company is functioning very efficiently. The company is well supported by a

highly motivated, focused and committed employee’s base. The management staff is

cordial and they find time for the workers in spite of their busy schedule. They have a

uniform code for all the employees. This made me difficult to find out who is what and

what their position is.

But after being there for so many days I understood the reason that they believe in “Unit

is Strength”. It symbolizes unity among them. There exists a cordial relationship between

employees and employer in the organization. Also this program helped me in

understanding the Mckensey’s 7s-model showing the organizational 7s aspects.

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