Report On Operation of Allah Wasaya Textile Mills

ALLAH WASAYA TEXTILE & FINISHING MILLS
First of all I am thankful to Almighty Allah who gave me the potential to study and work and Who helped me in every field of life. Then I am thankful to my respected teacher
Mr. Hayat Muhammad
Awan
who guided and helped me in completing this manuscript and
whose help is like a torch of light for me in darkness. I am also very thankful to Mr. Malik General Manager of ATM and Mr.
Muhammad Khalid, The
Muhammad Ismail Accountant in
ATM, for providing me the necessary information in completing my report. Thank you.
Quality Is Our Strength
DEDICATION
This report is dedicated to my
Who always pray for me to succeed in every field of life.
BOARD OF DIRECTORS
The Board of Directors consists of following members
MIAN MUHAMMAD JAMIL MIAN MAQBOOL AHMAD SHEIKH

Other Members are
THE CHAIRMAN
CHIEF EXECUTIVE
MRS. NUSRAT JAMIL MIAN SARFRAZ AHMAD SHEIKH MIAN TANVIR AHMAD SHEIKH MIAN TAUQIR AHMAD SHEIKH MIAN FAROOQ AHMAD SHEIKH MISS. ZAHRA FATIMA JAMIL MUGHAL
SECRETARY:
MUHAMMAD QASIM
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INTRODUCTION TO ATM
Allah Wasaya Textile Mills Limited is located in the old and ancient city of Multan near the colony of Mumtazabad. The company incorporated its first unit in 1956 and the next unit was established in 1958 as a private limited company in the name of Mr. Allah Wasaya & Company Multan and later on the name was changed to Allah Wasaya Textile and Finishing Mills Ltd. Previously it was producing yarn as well as cloth but later on the production of cloth was stopped in 1978 due to old machinery and now the company is only producing yarn as its finished good.
SHARES
The shares of Allah Wasaya Mills are also floated in the stock exchange. The paid-up capital of the Mill is 8M and 25% of this is floated in the market. The remaining are in the hands of directors. The face value of the share is Rs.10 and now its market value is round about Rs.160.The Company paid Rs.29 per share dividend in the last year. The total assets of the company are of about Rs.500M.
AUDITORS
Hameed Chaudhary & Company, Chartered Accountants, is their auditors, which make the audit of the company every year.
BANKS
The company is having its business with following banks HABIB BANK LTD BANK AL-HABIB METROPOLITON BANK The company pledges its raw material inventory with these banks and the bank pays on behalf of the company.
SPINDLES
The company has two departments in which the spindles are fitted. The total number of spindles is 28192, which are working round the day for the fulfillment of the customers orders.
MARKETS
The company is selling its finished goods in the local market like Faisalabad and Karachi. The company is not yet exporting anything to foreign markets.
POWER PRODUCTION
Company has no power plant of its own, so they purchase the electricity from WAPDA. It has two generators, which are capable if producing the half of the original capacity in case of load shedding.
LOCATION
Location is very important factor in terms of operating cost, profit and the price on which the goods are offered. For an organization, location is important in two ways It should be near to your supplier so that your cost can be reduced and you can deliver prompt service to your customer. You should be near to your target market, means that you should be near to your customer in order to serve them.
LOCATION OF ATM
There are following factors for this organization to be at the present location
AVAILABILITY OF RAW MATERIAL

ATM is located at the start of the city that helps it to get the raw material easily and as we all know that Multan is the house of cotton. Cotton of highest quality is produced in this region .so it is very easy for the organization to get raw material i.e. cotton, at low price and in abundance whenever it needs.
TRANSPORTATION
The Mill is located at a very good place because it is at the start of the city, so it is easy to get material from any transport at any time. It has no problem of congestion and every type of transport can come easily here.
LABOR AVAILABILITY AND COST

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Effective and efficient labor availability is another important factor in determining the location, so here ample labor is available for the organization at satisfactory prices. All types of labor i.e. skilled, semiskilled and unskilled can be easily made available when required.
ENERGY AVAILABILITY & COST

As a large amount f energy is required for running the plant, a proper arrangement of electricity is there form WAPDA for making the requirement .In addition to this they have two big generator which work incase of load shedding and the half capacity can be achieved from there generators.
ATTITUDE OF COMMUNITY
An Allah Wasaya textile mill is located near to the population and still the attitude of population is favorable because the unit is not causing any type of harm to environment. Its production unit is covered so there is no noise coming out of the premises of the factory and there is no pollution of smoke as well.
LIVING CONDITIONS OF EMPLOYEES

Location appeals to potential employees. All facilities are provided in locality and living standards are much better than the remote areas so workers prefer to work here than any other area. Work environment is very peaceful, calm and quiet.
PROXIMITY TO CUSTOMERS
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The mill is located in the area that is near to the customers, which are in Faisalabad and Karachi. All type of transportation is available to them to deliver the yarn to the customers.
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CAPACITY
Capacity means how much an organization is able to produce from its resources. There can be two types of capacity
PEAK CAPACITY
It is the capacity of the company under ideal conditions.
EFFECTIVE CAPACITY
It is the capacity of the company under normal conditions. The peak capacity cannot be achieved because the circumstances or conditions are never ideal so companies want to operate at normal capacity.
CAPACITY OF ATM
ATM is using its 92% capacity and the remaining is the capacity cushion, which is for the purpose of protection in the period of excessive demand. The daily output of the company is round about 38,000 pounds of yarn on average, which is the result of about 250,000 bobbins produced daily. Capacity in terms of bags per day is about 370 bags of 20s Count, which contain about 9000 cones produced daily.
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FORECASTING
There is no special method of forecasting in ATM. They have to make forecasting at the time of purchase of raw material. Forecasting all the times depend upon the Judgement Method that is based on past experience i.e. the demand of last period. Forecasting is always the job of directors whereas the General Manager assists the directors about the decision of purchase. Forecasting is about How much orders will come in future What quantity will be coming from these orders What will be the specification in that requirement So on the basis of this forecasting they purchase their raw material. If there is excessive demand than forecasted and the raw material in the stock is finished then they make production by purchasing that much of raw material that is needed to satisfy that excessive demand. They wait for the cotton season to purchase raw material to store for the next period.
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PURCHASE PROCESS OF ATM

The purchase process of ATM is not so much complex rather it is quite simple. The purchase is made only one time during the cotton season from November to February. They purchase inventory for the whole year because, at that time fresh cotton is available and the prices are also low because of the abundance of cotton. They ask for the samples from different suppliers. Then there is complex analysis of those samples on the basis of following factors. Short & long fibers Strength of the fiber The sample for checking is taken from each lot of 100 bales. If the quality of the sample is according to the requirements then that supplier is selected for the purchase of raw material. ATM doesnt make long term contracts with suppliers because they want to reduce the cost, so the supplier who is giving the low cost and high quality is selected which may differ from time to time. At the time of every purchase the process of checking the quality is repeated and the best one is selected.
REQUIREMENT OF THE MILL

The daily requirement of the Mill is about one lot and every lot contains 100 bales of cotton. The lots for the whole year are purchased at the start of the season.
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PRICE OF PURCHASED MATERIAL

The prices of cotton vary during the year. When it is in abundance the prices are comparatively low and the directors are eager to purchase more and more cotton because of less price. The situation can be reversed when cotton is scarce due to some reasons, then prices are very high and the company doesnt purchase in large quantity. It all depends upon the directors that what decision they make during the particular season. In this year the Company is purchasing the cotton at round about Rs.1650 per 40 Kg.
PAYMENT TO SUPPLIER
Payment to suppliers can be made in two ways Payment is made in advance in the form of check or draft Payment can be made after the inventory is received It depends on the terms and conditions between the supplier and directors that in what way they make payment. These terms and conditions are set after the quality of the raw material is checked by the laboratory.
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INVENTORY MANAGEMENT
Inventory is the stock of items held to meet the future demand. Being the process focus firm ATM pays a special attention to the inventory management. The inventory of ATM mainly consists of raw material i.e. cotton bales and in the form of work in process. There is no concept of finished goods inventory because company produces according to the demand. But in some cases when there is a slump in the demand then finished good is stored otherwise not.
RAW MATERIAL INVENTORY

The inventory management is not so difficult. Cotton for the whole year is purchased in the start of season and is pledged either in HABIB BANK or BANK AL-HABIB or METROPOLITON BANK. As the raw material comes in the factory they call a personnel from the bank. That person examines the inventory and gives report to the office and then the bank pays for that material and then material is placed in the warehouses. It means that inventory belongs to Habib Bank. A man from Habib bank is always present at the warehouse where the inventory is placed and that person is called godown keeper. When there is need for cotton in factory, they ask to that person to give the material of their requirement. The basic purpose of keeping the raw material inventory is To meet the demand of individual customer and the market as a whole. To make efficient delivery possible Quality Is Our Strength
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To provide a hedge against the demand For the smooth running of the companys operations
GRADING OF RAW MATERIAL

The raw material is placed gradewise on the basis of quality. There are different grades of cotton e.g. A+, A, A-, B+, B, B-, C+, C, C-, D+, D, D- etc. ATM is currently operating in B+. There is computerized checking of raw material and after that raw material is placed under one of these categories.
WORK IN PROCESS INVENTORY

As there are different machines in different departments and these machines have some part of raw material that is called work in process inventory. ATM always has about 60 thousand kg of cotton in process to meet the requirement of 28192 spindles.
SAFETY STOCK:
There is no concept of safety stock as there is already surplus of inventory.
EOQ:
There is no concept of EOQ. It all depends upon the management that how it views the changing environment.
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SPARE PARTS INVENTORY:

The spare parts inventory consists of many items which are useful for the machinery in case of any machine breakdown. Major part of this inventory consists of Ball bearings Belts Bushes
INVENTORY REVIEW:
The inventory review is made periodically. The period for the review is generally one month.
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PRODUCTION DEPARTMENT
There is a separate production department in ATM headed by the production manager. In production department the collaborative orientation of supervisors and engineers is of great importance be cause they are continuously involved in meetings and exceeding quality standards set by the management. The coordination between different departments of an organization is necessary for the smooth running of the business and for the fulfillment of customers orders and this phenomena is very evident in ATM. The production department of ATM is fully geared to any type of changes taking place in the environment. This is backed by the good machinery capable of producing finished according to the demand of customers.
FINANCE OR ACCOUNTS DEPARTMENT

This is the most important department of any organization because the record of all the transactions is maintained here. Different types of statements are prepared to show the inflow and outflow of resources and these statements have key role in the functioning of the business as these tell the owners that what have they gained from their business. ATM has its own finance department headed by the finance manager and is responsible for maintaining all the record of the transactions. The record of shares is also maintained in this department.
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PRODUCTION PROCESS DESIGN

The production department of ATM consists of following stages.
BLOW ROOM
When the production department receives the green signal for starting production then the raw material is issued to the blow room which comprises of different machines that converts raw cotton from bales to rolled Laps and the impurities are also removed from raw cotton in this department.
CARDING SECTION
In this section Lap sheet is converted to Sliver and remaining impurities & trash are removed. In this process short fibers are also extracted. The sliver is then transferred to drawing section.
DRAWING SECTION
In this section drawing, parallelization and mixing of fibers is done. Blending of different fibers e.g. polyester and cotton is also done in this department.
SIMPLEX SECTION
In this section material from previous department is converted to Roving.
SPINNING SECTION
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In this section Roving is converted to yarn which is rolled on plastic pipe called bobbin.
WINDING SECTION
In this section yarn on small bobbins is rolled on large bobbins called Cone which can be sold in the market. The yarn faults are also removed in this section.
PACKING
In this section the yarn is packed for delivery in large bags each 100 pounds in weight and these bags are sold to customers.
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QUALITY CONTROL
For a company to survive and measure its market share, maintaining quality is as essential as blood in the human body. The company, which maintains quality, has edge against those, which dont pay great attention on quality. Whether it is a manufacturing firm or a service organization, they have to take care of quality if they want to remain in the competitive market. ATM pays a lot of attention on quality because it has maintained its image as a qualitative organization. Quality is checked at every section and if it is found according to the standards then the next process starts otherwise first of all that fault is removed and then the material is sent to the next department. Quality check is important for the company as it allows the company to avoid process repetition so it saves Time, material, labor and customer dissatisfaction that van result in loss of market.
LABORATORY
ATM has its own quality control department in the form of a laboratory, which is responsible for checking quality after every process. The samples from every department are sent to the laboratory and these samples are then checked. If the quality is found correct, then the material is allowed to the next process.
QUALITY CONTROL PROCESS

The quality control process is as follows
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RAW MATERIAL PURCHASE

Purchase of qualitative raw material is prerequisite for maintaining quality standards. It is for this reason that material is inspected before purchase. Samples are taken from different suppliers and checked on random basis because it is difficult to check the whole lot. If the quality is according to the standards and the price is appropriate then that supplier is selected. Complete lots are not checked for the following reasons Time constraints Cost involved The quality is checked on the following basis Strength of cotton Short fiber Long fiber
QUALITY MAINTENANCE DURING PROCESS

After the material is issued to the production department, quality checks are effectively maintained at each and every step of operation. Quality may get out of control because of the following reasons Fault of machine Fault of worker So, it is necessary to check qulity so that if there is any fault, it can be removed. During the process following intermediate products are checked for quality
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Lap Sliver Roving Bobbins Cones If any of them is not according to the standards, the process is repeated and the faults are removed.
FINAL QUALITY CHECKS

Final checking of the finished goods is necessary because if has any type of fault, and it is sold without checking the quality then company can loose its market image. It is for this reason that quality of the final product (Yarn) is checked with great attention.
WEIGHT CHECKING
The finished product (yarn) at last stage, checked for weights that should be according to the standards i.e. 100 pound per bag. If the weight of any bag is less than this standard weight, it is not sold until weight is correct.
SHADE CHECKING
Before packing the cones for sale, these cones of Yarn are checked in Ultraviolet Rays for correct shade. If the shade is according to the standards then these cones are sent to the storeroom, otherwise sent back. ATM has a separate section for checking the shades of these cones. It is a dark room
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with tubes of Ultraviolet Rays. The cones are set at the racks and these racks are sent to that room, for shade checking.
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AGGREGATE PLANNING
ATM is a process focus organization and it responds to the customers orders. They make planning based on the previous cycle. They are operating according to the Make to order strategy.
COMPETITIVE PRIORITIES
Competitive priorities are the companys unique characteristics that lead to success of the company. Every organization has some competitive priorities, which shows the progress of the company. ATM is operating according to the following competitive priorities Low cost On time delivery Consistent quality
PLANNING
Planning is made by directors with the help of different managers.
PLANNING OF WORKERS
It includes the planning of officers, supervisors and workers. Planning of officers is dependent upon the owners that how much they need and according to the need this staff is recruited and the duties are assigned on the basis of their skills. Every department is headed by a supervisor who is responsible for every thing happening in the department.
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Workers are allocated according to the machines and workload.
PRODUCTION PLANNING
Production planning is done by production manager on the following basis Requirement of the market Availability of raw material Prices of raw material Prices of end product Aggregate planning is made considering the following factors 1. Cost of production of new order 2. Time to complete 3. Profit earning
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SALE OF THE FINISHED PRODUCT
ATM is selling its Yarn to the domestic market like in Faisalabad and Karachi. There are some brokers who are the mean of contact between supplier and the buyer. When any weaving mill needs yarn, they contact the brokers to find the appropriate supplier. These brokers have contacts with the mills which are producing yarn, and when they have order to purchase they take samples from different suppliers and send these samples to the buyer who after examining them order the broker to purchase on their behalf if the quality is according to their standards. ATM is selling its finished good at a rate of Rs.56 per pound and earning high profits. The last years profit was Rs.57, 735,646, which is greater than the profit of the previous year.
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MACHINE TYPES
There are different machines in the factory, which are purchased from different countries and have different names. ATM has two production units in which different types of machines are installed.
UNIT 1 BLOW ROOM: CARD:

China Toyoda Japan
UNIT 2
Trutzseller Germany Toyoda Japan
DRAW FRAME: Toyoda Japan SIMPLEX: RING:

Toyoda Japan Toyoda Japan
Toyoda Japan
Toyoda Japan Reiter Swiss
MATCH CONER: Murata Japan
Murata Japan
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PERFORMANCE OF THE COMPANY

The mill was operated to produce polyester cotton blended yarn throughout the year. The market for the yarn remained favorable during the year. The prices of cotton however mostly remained sub-dued in the local market due to its slump in the international market. By the grace of Almighty Allah, the company earned a Net After Tax Profit of Rs.57, 735,646 for the year
2000 compared to the Net After Tax Profit of Rs.15, 331,281 last year.
The Mill was operated for 1,091 shifts during the year. The overall actual production when converted to 20s Count came to 11,130,950 Kgs compared to 10,229,596 Kgs on the same basis, last year. This shows the perpetual growth of the company.
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EVALUATION OF THE COMPANY

By studying the organization I come to the result that ATM is the company which is performing according to the standards set by the owners. It is producing the finished goods in a qualitative form and meeting the requirements of its customers. It has many satisfied customers, which can guarantee its continued performance. Inspite of the fact that it is located in the residential area, but it is not disturbing the domestic life because its plants are covered and any type of noise is not coming out of the premises of the factory. As a result the behavior of the community is favorable towards the company. For its workers, it gives them many facilities like high salaries, bonuses, and compensation for any loss and many more. So all types of staff are quite satisfied which is also a plus point for the company.
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Report On Operation of Allah Wasaya Textile Mills

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ALLAH WASAYA TEXTILE & FINISHING MILLS

Mr. Hayat Muhammad

who guided and helped me in completing this manuscript and

Muhammad Khalid, The

Muhammad Ismail Accountant in

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

This report is dedicated to my

Who always pray for me to succeed in every field of life.

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

MIAN MUHAMMAD JAMIL MIAN MAQBOOL AHMAD SHEIKH

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

AVAILABILITY OF RAW MATERIAL

LABOR AVAILABILITY AND COST

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

ENERGY AVAILABILITY & COST

LIVING CONDITIONS OF EMPLOYEES

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

PURCHASE PROCESS OF ATM

REQUIREMENT OF THE MILL

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

PRICE OF PURCHASED MATERIAL

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

RAW MATERIAL INVENTORY

ALLAH WASAYA TEXTILE & FINISHING MILLS

GRADING OF RAW MATERIAL

WORK IN PROCESS INVENTORY

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

SPARE PARTS INVENTORY:

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS

Quality Is Our Strength

ALLAH WASAYA TEXTILE & FINISHING MILLS