Asfa Final Project

1
ASFA
A Summer Training Project
On
Swami Atmanand Saraswati Pharmaceutical Co-operative Society
Submitted in Partial Fulfillment of BBA Program
Submitted To:
BRCM College of Business Administration
Veer Narmad South Gujarat University
Submitted By:
Trushna Yagnik
Disha Patel
Year: 2009 - 2010
B.R.C.M COLLEGE OF BUSINESS ADMINISTRATION
2
ASFA
ACKNOWLEDGEMENT
We would like to express our most heartfelt thanks to Shri Swami Atmanand
Sarswati Ayurvedic Co-operative Pharmacy Limited (ASFA) for providing us an
opportunity to take training to their organization.
We are also thankful to director and over professors for provide us guidance. We
would like to pay our kind acknowledgement to Mrs. Swati Nayak(Managing
Director of Asfa) for providing her practical knowledge and we heartly thanks to our
training guide Mr. Kelan Patel (Production Manager).
We express our thanks to Mr. Nilesh pandya for providing finance data and other
information and we are also thankful of those people and workers who are directly
or indirectly helped us in our training project work.
Trushna yagnik
Disha patel
3
ASFA
DECLARATION
We the undersigned, Trushna Yagnik & Disha Patel that this project report entitled
A study on management of Asfa is result of our own training work carried out
during may-June 2010 and has not been previously submitted to any other
university or institution for any other examination and for any other purpose by any
other person.
We will not use this project report in future to use as submission to any other
university, institutes or any other published without written permission of any guide.
We also promise not to allow/ permit any other person to copy from this report in
any form.
If we are found/change a defaulter of above declaration. I know that my present or
future submission may become invalid, and / or I may be permitted to appear in the
final exam.
Trushna Yagnik
Disha Patel
4
ASFA
Index
Sr.No Contents Page no.
1 Introduction 5
2 Marketing
management
24
3 Production
management
48
4 Financial
management
115
5 Human resource
management
148
6 Bibliography 187
5
ASFA
Introduction
Ayurveda is the science of life that not only
deals with Sukha Ayu, Dukkha Ayu, Hita Ayu,
Ahita Ayu but also deals with the ways and
means to achieve health the path that leads to
disease.In all ayurveda deals with quantum of
the Ayu, the life.
ayurveda /ayurveda/ (iyurved-ah) (iyur-vadah) [Sanskrit] a classical system of
medicine founded 5000 years ago and currently practiced in India. Its emphasis is
on balance with the environment and interpersonal communication and is based on
the principles that humans are microcosmic representations of the entire universe
and that health is the natural end of living in harmony with the environment.
Ayurveda is a system of wholistic medicine from India that aims to bring the
individual into harmony with nature. It provides guidance regarding food and
lifestyle, so that healthy people can stay healthy and people with health challenges
can improve their health.
6
ASFA
Origin & history
Ayurveda is an intricate system of healing that originated in India
thousands of years ago. We can find historical evidence of Ayurveda in the ancient
books of wisdom known as the Vedas. In the Rig Veda, over 60 preparatison were
mentioned that could be used to assist an individual in overcoming various ailments.
The Rig Veda was written over 6,000 years ago, but really Ayurveda has been
around even longer than that. What we see is that Ayurveda is more than just a
medical system.
It is a Science of Life. We are all part and parcel of nature. Just as the animals and
plants live in harmony with nature and utilize the Laws of Nature to create health
and balance within their beings, we, too, adhere to these very same principles.
Therefore, it is fair to say that Ayurveda is a system that helps maintain health in a
person by using the inherent principles of nature to bring the individual back i nto
equilibrium with their true self. In essence Ayurveda has been in existence since the
beginning of time because we have always been governed by nature's laws.
God Dhanvantari is said to be an avatar of Vishnu from the Hindu tradition, and god
of ayurvedic medicine. Dhanvantari was an early Indian medical practitioner and
one of the worlds first surgeons. Based on Vedic traditions, he is regarded as the
source of ayurveda. He perfected many herbal based cures and natural remedies
7
ASFA
and was credited with the discovery of the antiseptic properties of turmeric and the
preservative properties of salt which he incorporated in his cures.
Several unique aspects of Ayurveda :
O Ayurveda offers reference points for managing treatment decisions specific
to each case. Ayurvedic theory is profoundly useful in analysing individual
patient constitution and understanding variations in disease manifestation.
O The Ayurvedic framework can be used to structure working models of the
unique state of each patient, and to project a vision or goal for a whole state
of health, again unique to each case.
O Ayurveda offers specific recommendations to each individual on lifestyle,
diet, exercise and yoga, herbal therapy, and even spiritual practices to
restore and maintain balance in body and mind. Ayurveda sees a strong
connection between the mind and the body, a huge amount of information is
available regarding this relationship.
O This understanding that we are all unique individuals enables Ayurveda to
address not only specific health concerns but also offers explanation as to
why one person responds differently than another.
8
ASFA
Principal of Ayurveda
According to ayurvedic philosophy an individual bundle of `spirit, desirous of
expressing itself, uses subjective consciousness or Satwa to manifest sense organs
and a mind. Spirit and mind then project themselves into a physical body, created
from the five (Pancha) great (maha) eternal elements (bhutas) together called the
Panchamahabhutas which arise from Tamas. The sense organs then using Rajas
to project from the body into the external world to experience their objects. The
body becoming the minds vehicle, its physical instrument for sense gratification.
The Bhutas combine into "Tridoshas" or bioenergetics forces that govern and
determine our health or physical condition. While the three gunas (Rajas or activity,
Tamas or inertia and Satwa, which balances the first two) or psychic forces
determine our mental and spiritual health. Ayurveda is thus a holistic system of
health care that teaches us to balance these energies in order to achieve optimum
health and well being
9
ASFA
AYURVEDIC MEDICINE INDUSTRY IN INDIA
Ayurvedic medicines are produced by several thousand
companies in India, but most of them are quite small, including numerous
neighborhood pharmacies that compound ingredients to make their own remedies.
It is estimated that the total value of products from the entire Ayurvedic production
in India is on the order of one billion dollars (U.S.). The industry has been
dominated by less than a dozen major companies for decades, joined recently by a
few others that have followed their lead, so that there are today 30 companies doing
a million dollars or more per year in business to meet the growing demand for
Ayurvedic medicine. The products of these companies are included within the broad
category of "fast moving consumer goods" (FMCG; which mainly involves foods,
beverages, toiletries, cigarettes, etc.). Most of the larger Ayurvedic medicine
suppliers provide materials other than Ayurvedic internal medicines, particularly in
the areas of foods and toiletries (soap, toothpaste, shampoo, etc.), where there may
be some overlap with Ayurveda,such as having traditional herbal ingredients in the
composition of toiletries.
The key suppliers in Ayurveda are Dabur,
himalaya, and Zandu, which together have about 85% of India's domestic market.
These and a handful of other companies are mentioned repeatedly by various
writers about the Ayurvedic business in India; a brief description is provided for
them, arranged here from oldest to newest.
10
ASFA
STATUS OF AYURVEDA IN INDIA
The Indian government and non-government organizations have been collecting
statistics on the Ayurvedic system in India and these data about the manpower and
institutional aspects of Ayurveda have emerged*:
1 Number of registered medical practitioners: 366,812
1 Number of dispensaries: 22,100
1 Number of hospitals: 2,189
1 Number of hospital beds: 33,145
1 Number of teaching institutions (undergraduate): 187
1 Number of upgraded postgraduate departments: 51
1 Number of specialties in postgraduate medical training: 16
1 Number of pharmacies manufacturing Ayurvedic medicines: 8,400
In India, 60% of registered physicians are involved in non-allopathic systems of
medicine. In addition to the nearly 400,000 Ayurvedic practitioners, there are over
170,000 homeopathic physicians; India has about 500,000 medical doctors (similar
to the number in the U.S., but serving nearly 4 times as many people). Reliance on
Ayurvedic medicine is heavy in certain regions of India, such as Kerala in the
Southwest. Many Ayurvedic practitioners in small villages are not registered. One of
the famous clinics of India is described in Appendix 2 and a new clinic complex is
serving visitors from abroad is mentioned in Appendix 3.
*(given figers are updated as on 31/3/2008)
11
ASFA
Development of MODERN MARKET of ayurveda
The SAARC (South Asia Association for Regional Cooperation) was formed in
1985; its member countries are India, Pakistan, Nepal, Bangladesh, Bhutan,
Maldives, and Sri Lanka. These countries all have been influenced by Ayurvedic
medicine. Trade in Ayurvedic medicines within the SAARC is mostly limited to raw
materials that grow in one region (e.g., high mountains, northern climate) and are
then exported to other regions (e.g., lowland southern areas). Because of the large
number of very small factories that try to service the local communities, with
products labeled with the local language, there is little opportunity for suppliers in
one SAARC country to send finished products to another SAARC or even abroad.
Entrepreneurs in these countries (mainly in India) seeking to break into the
market for natural products have determined, rightly, that the demand for traditional
style Ayurvedic medicines both inside and outside the region is limited, despite
growth trends as high as 20% annually encountered in the late 1990s. They have
aimed to bolster interest by carrying out scientific research into promising herbs and
formulas that are based on Ayurveda but not necessarily reflecting traditional
practices. Of necessity, such research eventually focuses on finding of active
ingredients, and this has led to the development of isolates from plants that are sold
as "nutriceuticals" (substances not registered as drugs, but used like nutritional and
dietary supplements, sold over the counter in various formulations with specific
health benefits portrayed for them). For these, there is a growing worldwide
demand. The main suppliers of nutriceuticals are Japan, China, and the U.S., but
India stands to become a significant contributor.
12
ASFA
Companys profile
Companys name : SHRI SWAMI ATMANAND SARASWATI
AYURVEDIC CO-OPRATIVE PHARMACY LTD.
Registered office : CHAUTAPUL BRANCH
Opp. Bank of Baroda,
Chautapul,
Surat-3,
Phone No: (0261) 2596413.
No. of branch : 2 Factory in Surat
6 other branch
8 total
Email Add. : asfaayu@yahoo.co.in
Registered date : 2 Sep, 1949
Started operation : 2 Sep, 1949
Service provide : cheap ant best quality medicines for the well
Being of the society
13
ASFA
HISTORY AND INTRODUCTION OF ASFA
Swami atmanand saraswati co-operative pharmacy Ltd. Is one of the famous
and respective pharmacies in surat city in manufacturing of ayurvedic medicines.
Once in a golden morning Shri Swami Atmanand Sarswati comes in Surat and he
stat to give knowledge of culture/ religion and ayurveda by his lectures at every
place of Surat city. He set up Tapi Brahmcharya Ashram at the land which was
donated to in at the bank of river Tapi. In Ashram many student study about
Ayurveda and Sanskrit. And with passes of time he started an ayurvedic clinic and a
Pharmacy for medicines needed to run clinic. And slowly with flow of time the
promotion and expansion, the small Pharmacy become only one co-operative
ayurvedic pharmacy of Gujarat which is established in 2
nd
June, 1948 with name
Shri Swami Atmanand Sarswati Co-operative Pharmacy Limited which is known as
its short name ASFA.
ASFA (Shri Swami Atmanand Sarswati Ayurvedic Co-operative Pharmacy
Limited) is established in 1949 in Surat at the bank of river Tapi. It is an only one co-
operative pharmaceutical pharmacy in Gujarat. Shri Swami Atmanand Sarswati who
was the man with strong mind power established the Pharmacy.
Shri Swami Atmanand Sarswati was spent his whole life in survive of people and
teach Ayurved to his Shishyas. He had only one goal of his whole life as follows:
I dont desire state, I dont desire paradise, I even dont desire moksh, but I
desire to solve the problems of people who are suffering from the dieses by
way of using Ayurvedic treatment.
ASFA has its head office at chowta pool and it has a factory at Varachha road in
Surat. ASFA also expanded its production capacity and established one more
factory at Navagam. Today organization has completed 62 years and having 4161
members with 3.44 corers of turn over. The firm has 7 branches all in state. and 91
staff members.
14
ASFA
By showing the above mentioned figure we can say that ASFA is very rapidly grow
and expand in whole Gujarat. It has opened branches at Valsad, Baroda,
Ahemdabad, Bardoli and Bharuch etc. It has also work as a consulting in Valsad
and Surat. It established a consulting clinic in Valsad where the information about
various ayurvedic medicines is provided to people without taking any pay.
ASFA sold its product in most of cities of Gujarat and Mumbai through its dealers.
ASFA has widely distributed dealer network. ASFA produce qualitative product,
by reason of that a slogan Aushadho to ASFA nij.
ASFA get a certificate of GMP (Good Manufacturing Practice) from Gujarat state
food and medicine Control Corporation. ASFA is a first Pharmacy which is gets
this type of certificate. ASFA get GMP certificate in 2004 and also get ISO 9001-
2000 in 2005 and laboratory of ASFA get permission from food and medicines
commissioners office, Gandhinagar.
The organization aimed to provide cost effective quality ayurvedic medicine by
adopting latest technology in manufacturing with continual improve quality
management system for better customer satisfaction.
15
ASFA
Details of promoters and owners:
A board of directors in which many members are well qualified in this field
manages swami atmanand saraswati ayurvedic co-oprative pharmacy ltd some of
the members are holding doctors degree.This board of directors is responsible for
providing guidelines to manage the company, taking major
decision,formulating,solving major problems, etc.
There are 16 members in the board of directors. Some of the members are
ayurvedic doctors and remaining is from different field. They are doing their very
well.
BOARD OF DERECTORS OF ASFA
Financial highlights:
Dr. Navinbhai B. Patel President
Shri Ramanlal P. Patel Wise President
Dr. Purushotambhai P. Mistri Minister
Dr. Kanubhai G. Mavani Director
Dr. Chhotubhai L. Patel Director
Dr. Tarunkumar M. Pathak Director
Dr. Abhaybhai R. Shah Director
Shri Sanmukhbhai J. Patel Director
Shri Ranchhodbhai K. Patel Director
Dr. Bankimchandra R. Thakar Director
Dr. Vasantrai M. Desai Director
Shri Jagdishbhai P. Patel Director
Shri Arvindbhai M. Patel Director
Dr. Pradipbhai J. Suryavanshi Director
Dr. Iswarbhai K. Patel Director
16
ASFA
The company had issued five thousand shares of rs.100 each raising the capacity
of five lacks rupees.athorised share capital of the company is fully paid up and at
the present there is no plan to increase share capital.company is making enough
profit and has enough funds to finance capital and day-to-day expenditure.these
funds are as follows:
Year 2005-06 2006-07 2007-08 2008-09 2009-10
No. of share
holder
4121 4129 4130 4145 4161
Share capital 500000 500000 500000 500000 500000
Reserve fund 2652703 2827634 3057271 3318598 4028616
Dad stock fund 1476592 1566765 1652619 1732193 2097792
Machinery
depreciation Fund
2062887 2400929 2730064 3073434 4790829
Building
depreciation fund
2709406 3050780 3358018 3634531 6190145
Building fund 1451225 1598300 1785966 1932491 2074806
Others 6212680 6358092 6465628 6653538 11263007
Sales 27520169 32114100 27923203 31035638 34458469
Dividend 15% 15 % 15 % 15 % 15 %
17
ASFA
Location of Factory and Branches
18
ASFA
The company has total seven retail outlets,which distributes the medicines
produced by the company.these are companys own outlets.these outlets are
located at different cites and towns of gujarat state at strategic places
Factory of ASFA
VARACHHA FACTORY
opp.kalakunj society,
Near Panini taki,
Varachha road,
Surat-395006
Phone no. (0261-648092, 644410)
NAVAGAM FACTORY
11-18, Navagam Udhyognagar Co-operative Sangh,
Navagam,
District: Kamrej,
Surat,
Phone no: (02621-252440)
OUTLETS:
19
ASFA
SURAT
1) CHAUTAPUL BRANCH 2) 5-7, dhanvantari complex,
.Opp. Bank of Baroda, Near Ayurvedic Hospital Compound,
Chautapul, Sumul dairy road, Station,
Surat-3, Surat
Phone no: 0261-2596413 Phone no : 0261-2533963.
AHEMDABAD
Dhanasutar Ni Poll,
Relief road,
Ahemadabad.
Phone no : 07922135503
VADODARA
Balavant Building,
Kharivav road,
Ravpura,
Baroda.
Phone no: 0265-2411490.
BHARUCH
20
ASFA
8, Navrang Shopping Center,
Sevashram road,
Bharuch.
Phone no : 02642-268256.
VALSAD
3, Amar Chambers,
Opp. the Lal School,
Station road,
Valsad.
Phone no: 02632-242316.
BARDOLI
Hirachand Nagar,
Near sardar baag
Station road,
Bardolis
Phone no :02622-224116.
21
ASFA
ORGANIZATION STRUCTURE OF ASFA COMPNY
22
ASFA
Future plan of ASFA
# ASFA is only limited to Gujarat but now the company wants to expand its
market share in to other states like Maharashtra also.
# ASFA also plan to introduced 4 new medicines in the market which may
be :
Ojas tablet
mouth wash
ASFA bam
sleep well tablet
# Company has planned to increase overall turn over of the unit.
Achievements and awards of ASFA
Name of the
award
Year of the
award
Achievement Photo of the award
Surat district co-
operative bank
limited
1966 Best performance of
the year
23
ASFA
Sahkar bharti
sanmaan patra
2002 Best co-operative
society
Ujas award 2003 Highest work
efficiency
Surat jilla sahkari
sangh
14
th
nov,2003
No.1 co-operative
society in surat
district
24
ASFA
Lions club award 2006 Best performance
during the year
25
ASFA
MARKETING MANAGEMENT
26
ASFA
Introduction.
Marketing is everywhere. Formally or informally people and organization
engages in vast number of activities that we could called marketing. Good
marketing has become an increasingly vital ingredient for business success. Good
marketing is no accident but result of careful planning and execution. It is both
science and art.
Market and Marketing.
Traditionally a market was physical place where buyers and sellers gather to
buy and sell goods. Economist describes a market as a collection of buyers and
sellers who transact over a particular product or product class.
Marketing is about identifying and meeting human and social needs. The American
Marketing Association offers the definition as, Marketing is an organizational
function and a set of processes for creating, communicating and delivering value to
customers and for managing customer relationship in ways that benefit the
organization and its stakeholder

27
ASFA
Structure of marketing department
28
ASFA
Types and classification of products.
Many people think a product is a tangible offering, but it can be more than
that. Broadly a product is anything that can be offered to a market to satisfy want or
need including physical goods, services, experiences, events, persons, places,
property, organization, information and ideas.
ASFA produce consumer goods. ASFA more than 288 medicines of
different categories in different quantity which are classified as follows:
Categories Medicines
Rasa Sutshekhar rasa
Vaat chintamani rasa
Vasant kusumakar
Jawahar mohra rasa
Chandramrut rasa
Bhasma Akeeka bhasma
Mandoor bhasma
Yashad bhasma
Raupya bhasma
Shankh bhasma
Sogothi BAL raksha sogothi
Khokhalini sogothi
Darajni sogothi
29
ASFA
Kushthhar sogothi
Churna Arjuna churna
Kuberax churna
Nagkeshar churna
Markandi churna
Sarpgandha churna
Gugal Gokshuradi gugal
Triphala gugal
Kishor gugal
Pathyadi gugal
Dantmanjan Ayurvedic dantmanjan
Bhallatak dantmanjan
Dindayal dantmanjan
Syrup ASFA cough syrup
Banfasa
Balchaturbhadra syrup
Shankhpushi syrup
Taila Panchguna taila
Narayan taila
Brahmi hairoil
30
ASFA
Bhrungraj taila
Dhrut & Kwath Brahmi dhrut
Trifala dhrut
Dasmul kwath
Maharasnadi kwath
Malam Jivanyadi malam
Darajno malam
Pardadi malam
Avaleh Chyavanprasha aveleh
Vasavaleh
Pipalvadi avaleh
Kantkaryavaleh
Asav & Arishta Abhayarishta
Ashokarista
Chandanasava
Drakshasava
31
ASFA
Classification of the products of ASFA as per the marketing
management
Products are classified into three groups on the basis of the durability,
tangibility, and use (consumer and industrial).
According to durability and marketing, products are divided into three groups:
1) Nondurable goods are tangible goods normally consumed in one or few
uses, such goods are perishable in nature, they also require heavy marketing
and hence steel is not included in it.
2) Durable goods are tangible goods which last longer and require personal
selling and command a high margin
3) Services are intangible and perishable in nature.
Consumer Goods Classification:
Consumer Goods are those goods which are purchased by the consumer on
shopping basis:
Convenience Goods
Shopping Goods
Specialty Goods
Unsought Goods
32
ASFA
All the above goods are not related with the industrial products and Essar Steel has
a business whose clients are huge industries hence it does not sell goods to
consumer directly. Further, Essar Steel Manufacture goods which require pickled
painting and coating hence Essar is not involved in it. And with coating Steel cannot
be sell.
Industrial Goods Classification:
Industrial Items can be classified in terms of their relative cost and how they enter
into the production process:
Manufactured Material and Parts
Capital Items
Business and Services
33
ASFA
Asfa produces aurvedic medicines which falls into consumer goods category and is
sub categorized as speciality goods.
34
ASFA
Unique features of ASFAs products.
ASFA produces more than 288 medicines and many other products. ASFA
produces medicines in various categories like asav, arishta, syrup, churana, avaleh
etc. and all of them has different unique features but main features of ASFA
product is Better quality in low price
We have a variety of asav and arishta that are prepared on the time testing
principle of ayurvedic. Our products in asav and arishta are of high medical
value then that of others
ASFAs syrup is meant for overall growth, stimulate appetite, and correct
digestive system and cough and respiration disorders.
ASFA has prepared variety of churna through constant research and
experiments and that had been highly effective to cure digestive problem,
skin diseases, joint pain, cold & cough & many other.
ASFAs avalehs are prepared from herbs which are rare to found which was
not made by others. These avalehs are costly because special herbs are
used in it
ASFA sometime use ancient recipes for preparing medicines. ASFA has
also patent right of some medicines which are made by scientist of ASFA
laboratory.
35
ASFA
Customer segmentation and target market.
A marketer can rarely satisfy everyone in the market. Everyone doesnt like
the same goods. Therefore marketers started dividing up the market. They identify
and profile distinct group of buyers. Market segments can be identified by
examining demographic, psychographic and behavioral differences among buyers.
ASFA makes segments by geographic and demographic variables.
Geographic variables such as region, city, climate etc. ASFA select western India
region for selling its medicine and Surat city for production. Demographic variables
are age, gender, income, education etc. ASFA produces medicines for children,
young and old people. ASFA also produces medicine as per the diseases so it
differentiates in medicines for man and women in some special diseases.
ASFA has no particular target market. It operates for all kind of customers,
those who prefers ayurvedic medicines over other types of medicines to cure their
illness. Also ASFA is looking forward to enter into the production of cosmetic items
and is planning to produce ayurvedic items for women and men.
36
ASFA
Distribution Network.
Most producers do not sell their goods directly to the final users;
between them stands a set of intermediaries performing a variety of functions.
These intermediaries constitute a marketing channel also called trade channel or
distribution channel. Formally, marketing channels are set of interdependent
organizations involved in the process of making a product or service available for
the use or consumption.
A marketing channel performs the work of moving goods from producers to
consumers. It overcomes the time, place, and possession gaps that separate goods
and services from those who need or want them. Why would a producer delegate
some of the selling job to intermediaries? Delegation means relinquishing control
over how and to whom the products are sold. But the producers can often gain in
the effectiveness and efficiency by using intermediaries. Through their contact,
experience, specialization, and scale of operation, intermediaries make goods
widely available and accessible to target markets, usually offering the firm more
then it can achieve on its own.
0 level distribution network
37
ASFA
1 level distribution network
38
ASFA
ASFA has well developed distribution network for marketing activities. ASFA
have 62 dealers for selling its medicines. ASFA has its own distribution network.
ASFA sells its medicines by its own stores and these stores are created in whole
Gujarat state such as in Surat, Ahmedabad, Ankleshwar, Anand, Navsari, Vadodra
and in many other cities of Gujarat.
ASFA use zero level and one level channel of distribution. A zero-level
channel also called as direct marketing channel consists of a manufacturer selling
directly to its final customers. A one level channel consists of one selling
intermediary, such as retailer. ASFA provides medicines to its retail stores as per
their requirement and these stores sells medicines direct to customers so
customers gets medicines in lesser price then competitor.
Sales Procedure.
39
ASFA
If any dealer or customer has any complain against then ASFA take their
complain and take corrective actions.
Study of how customer orders are processed in ASFA.
40
ASFA
ASFA mostly does not take orders from customers for medicines but it takes
order for Chavanyaprasha, Gullkand and some other products. The steps of order
processing are as under:
1. ASFA receive the order from customer.
2. ASFA collect the information about order such as quantity, quality, packing
weight etc.
3. ASFA also clear the payment conditions and terms of payments with
customer.
4. ASFA check availability of raw-material of that product and if it is not in
stock give order to suppliers.
5. ASFA send material to production department for further process.
6. ASFA send finished products for quality checking in laboratory. Products
are of quality than thats packed in packing department and send to dispatch
department.
7. A dispatch makes entry and sends to customers home or at which placed he
want.
8. ASFA collect payment from customer and if order is large than provide
some discount to customer.
Details of competitors.
41
ASFA
ASFA is a co-operative pharmacy working with the objective of surviving
people. ASFA produces ayurvedic medicines. ASFA produces more then 300
products which other competitors do not produce. ASFA sells its products in
Gujarat and other nearer states and there is no other competitor with so large
production in Gujarat but then also ASFA faces competition from the national
and international companies like Zandu, Himalaya, Dabur, etc, from state level
companies like Puja pharmacy, Gujarat ayurved vikas mandal, etc and it faces
competition from companies likes Ban pharmacy, Baidyanath, Nahar pharmacy,
Charak pharmacy etc.
MARKET SITUATION OF ASFA AMONG COMPITITORS
42
ASFA
The key suppliers in ayurveda are Dabur, Zandu and Baidyanath which
together has about 65% of domestic market. Dabur Indis ltd.(1884) is Indias largest
ayurvedic medicine supplier and fourth largest producer of FMCG. Zandu (1919)
focuses preliminary on ayurvedic medicines but it produces chemical and cosmetic
products also. Himalaya is established in 1939 in Bangalore and has business
about 500 million dollar. Vicco (1958) produce tropical therapies based on ayurveda
and are best known internationally for its toothpaste product.
ASFA has main competition from Baidyanath and Charak. Sir Baidyanath
Ayurvedic Bhawan Ltd. Was founded in 1917 in Calcutta and specialized in
ayurvedic medicines. The company reports having over 700 ayurvedic products
made at 10 manufacturing centers with 1600 employees. Charak pharmaceutical
was founded in 1947 and currently has 3 distributions centres in India; it produces
liquid medicines, tablets and veterinary supplies.
43
ASFA
Comparison of 4ps of various products of ASFA with
competitors.
Marketing mix is the policy adopted by the manufacturer to get success in the
field of marketing. Those days when goods were matched with the market have
gone. Marketing mix is a term used to describe the combination of four inputs
which constitute the core companys marketing system the product, price
structure, promotional activities and the distribution (place) system. These are
popularly known as 4ps of marketing. The four elements of marketing mix are:
44
ASFA
+ Product.
A product is anything that can be offered to a market that satisfies a
want or need. ASFA produces more than 288 medicines for its customers.
Other local companies do not have so large range of product width and
length. ASFA use rarely found herbs in its medicines which differentiate it
from competitors. ASFA more qualitative product than the competitors.
ASFA also researches and produce new medicines and patent them. Such
medicines are ASFA haemetone, Reducid, ASFAlax, Gasowin, and
ASFA-tone.
+ Price.
Traditionally, price has been the major determinant of a buyers
choice. And this is still the case with large segments of buyers across the
globe. Although non-price factors have become important in the last few
decades, price still remains an important factoring determining sales and
profitability. Competitive pressures together with consumer and middle-man
behavior, and short term orientation of the companies have resulted in a
market place that is characterized by heavy discounting and sales promotion.
The marked or announced amount of money asked from a buyer is
known as basic price of product. ASFA use value pricing method for its
product. In this method ASFA charges low price for highly qualitative
product, as against its competitor. ASFA charge low price then its
competitor because ASFA spent less money on promotional activities.
ASFA charge low price because it is co-operative pharmaceutical company
and its main objective is to provide medicine at fair price, and not to earn
profit.
45
ASFA
+ Promotion.
Marketing communication consist of communicating marketing
activities through various forms of promotion that is personal selling,
advertising, publicity and public relationship, sales promotion etc. together
called promotion mix. ASFA do zero level marketing then also ASFA
easily sale its medicine and its dealer largely expand in all Gujarat.
+ Place.
Place means the decision by which company transfers their product,
location, inventory handling, warehousing, storage facility, and transportation
etc. ASFA has a big location for plant at bank of river tapi. ASFA is
located near the national highway so it can transport and get material easily.
ASFA ows retail store in various cities so it can easily provide medicines to
customers than its competitors.competitors like Puja, zandu, Himalaya,
Dabour etc have not so widely develop distribution network in Gujarat.
46
ASFA
Pricing Policies.
The marked or announced amount of money asked from a buyer is known as
basic price-value placed on a product. Price is the only element of marketing mix
that can be adjusted easily and in short time.
There can be competition between price-quality segments. The below
diagram shows nine price-quality strategies:
PRICE
Q
U
A
L
I
T
Y
High Medium Low
High 1)Premium
Strategy
2)High-value
strategy
3)Super-value
strategy
Medium 4)Overcharging
Strategy
5)Medium-value
strategy
6)Good-value
strategy
low 7)Rip-off
Strategy
8)False economy
strategy
9)Economy
strategy
ASFA has supervalue strategy for its products. ASFA provides medicines at low
price with high quality.
ASFA set price for its products by taking care of the below matters.
- ASFA set price considerin its objective of providing medicines at fair
price with good quality.
- ASFA decides price after production is over so it can estimate total
cost of production and other expenditure.
- ASFA also consider the price and pricing policies of competitors and
try to set fewer prices than competitors.
47
ASFA
Promotional and advertising policies.
ASFA is a co-operative pharmaceutical company. It was set up by Shree
Swami Atmanand Saraswati. They set up the pharmacy to reduce the pain of
people and make them strong and healthy. They decide to provide medicines at fair
price so poor people can also afford medicines. ASFAs main objective is to
provide service not to earn profit. Therefore, ASFA do not do marketing and save
money so it can provide medicines at low price. ASFA does not use advertising
and less use promotional activities as less as possible.
ASFA do promotion through public relations. ASFA made people aware about its
medicines through public relations. Public relation is informal form of marketing.
People who use ASFAs medicines tell others about it and so on. ASFA have
well developed dealer network in Gujarat which play important role for promotion of
ASFA medicines.
ASFA become popular in Gujarat and its near states because of its high qualitative
medicines and fairly low prices than others.
48
ASFA
Packaging and labeling.
In past company used secure packaging but with the passage of time
aluminum selling, foil selling to pack the medicines. For future companys is
planning to use sinking foil for packaging.
Company use glass bottels and plastic bottels to fill tonic, tablets and churna.
They take precautions to make pills, tablets moisture free and use cotton to take
care of tablets, pills. They use machines for filling tonic and also to seal the bottels.
Weighting machines is also available in the company for filling medicines according
to required weight at the time of packaging.
After packaging product goes for labelling. They include following information
on their label

Product
name:
Weight:
Batch no.:
Date:
Price:
Ingredients:
49
ASFA
Study of control system and reporting system of
employees.
Effective control system is necessary to successfully run the business.
Control system is needed for controlling the employees of organization. ASFA has
also some rules and regulations for its sales employees. ASFA does not do
marketing so it have not sales men but ASFA have sales executives who sale
ASFAs medicines at ASFAs stores.
Sales executives have to open the stores regularly. They have special
uniforms which they have to wear while working at the stores. Sales executives
have to behave politely with customers and listen to their complaints. Also, the
employees of each department and the workers of production department have their
dress code which they have to follow.
50
ASFA
PRODUCTION MANAGEMENT
51
ASFA
Introduction
In common parlance people believe that production is consuming or
combining various inputs, mainly material, labor, machines to manufacture value
added products. This view point about production function is not totally incorrect but
it is definitely an incomplete view point. It is old concept of production which is
applicable to only manufacturing industries. If this idea is accepted, a very big
segment of economy that is service sector is kept out of scope of production. It is
there for essential to consider service sector in the definition of production.
In relation to physical goods, production means manufacturing an object
using various inputs like raw material, power, labour, capital machines. In relation to
services, production means discharge of any function which has got some utility.
Production management is defined as making and implementing decisions
related to production processes so that desired goods and services are produced as
per specifications required, in the quantities they are needed, at the time they are
required and at optimum cost.

52
ASFA
Production management is essential for every organization and it is important in
following ways,
= It helps to satisfy the need of customer timely.
= It increases the productivity of organization.
= It gives better satisfaction to the employees.
= It satisfies the investors by increasing return on investment and capital
appreciation.
= It satisfies the community by welfare and development activities.
= It satisfies the suppliers.
= It benefits to whole nation.
53
ASFA
Organization structure of production department of ASFA
54
ASFA
PRODUCTION PLANNING
Production planning is the function of management which decides about the
resources that will be required for future manufacturing operations and of allocating
these resources to produce the desired output at right time, in right amount, of
required quality and at minimum cost.
Production planning is the planning of how much produce, what to produce,
requirement of human resource and finance. It is also the planning of quality
standard and raw materials requirement.
In ASFA production planning is done considering the sales of previous
year and demand of current year. On the basis of the sales of the previous year and
demand of current year company prepares the list of the medicines that are to be
produce throughout the year. After preparing the list of medicines, company refers
BMR (Batch manufacturing record) of the medicines that are to be produced
throughout the year for requirement of raw-material, machine capacity and man-
power. After considering the safety stock level of 40%, company places the order of
the raw-material which falls short of the stock of raw-material.
[BMR i.e. Batch Manufacturing Record is the record which shows the
requirement of raw-material, machine capacity and man power for producing the
particular quantity of medicine of a particular category. Also ASFA produce the
fixed quantity of the particular medicine according to the quantity of the medicine
mention in BMR irrespective of the quantity of demand forecast.
55
ASFA
MATERIAL REQUIREMENT PLANNING
Material requirement planning is a technique for determining the
quality and timing for the acquisition of dependent demand items needed to safety
master schedule requirements.
In the modern world, enterprise resource planning system is being used
extensively and it also takes care of whole organization instead of one unit of
organization. Basically material requirement planning consists of computer
programmed, which is run periodically such as weekly, monthly or quarterly to
incorporate the latest schedule of production requirement.
ASFA company as a such do not prepare any material requirement
planning as it produces the quantity of the particular medicine as mention in BMR
(Batch manufacturing record) if the company gets the order of produces the
particular medicine then it will refer BMR for the quantity of the medicine to be
produced and the requirement of raw material. After considering the safety stock
level of 40% company gives the order of raw material which falls short of current
stock level. So the question of preparing MRP does not come in to picture as it is
already mention in BMR the amount of material required to be produced in 1 lot of
medicine.
56
ASFA
Capacity requirement planning
Like MRP, the company do not do CRP that is capacity requirement planning
because they installed capacity of the machines in the company is according to
BMR so the company produces the quantity mention in BMR and not beyond that
quantity and also not less then that quantity as the company can not increase the
capacity and the capacity will not utilize fully respectively. Also the fixed quantity of
medicine which Is produced and being demanded by the dealer, the stock of that
medicine is 100% sold. If the dealer wants more quantity than they produced
quantity according to the BMR and stock the additional medicines for the future
period.
57
ASFA
Type of production system.
Broadly there are two types of production system
O Continuous production system.
When an organization decides to manufacture one standard product or a few
limited varieties of standard product, such an organization operates with
continuous production system. Here there is no differentiation in product
specification from customer to customer. A very large number of customers
are offered similar product. Such kind of production system is seen for items
58
ASFA
like cement, fertilizers, petrochemicals, bulk chemicals, sugar, automobiles,
and consumer durable.
There are two sub-categories of continuous system:
Continuous flow type of production system (flow shop
production system): In continuous flow type production system,
the entire plants or factory works as one integrated machine. It
is a special purpose plant. For e.g. petroleum refinery, cement,
chemicals, yarn manufacturing etc.
Assembly line production system: In assembly type of
production system, various components, spare parts are
assembled together to prepare final product. One can actually
see various production operations. For e.g. automobiles,
computer, wall clocks, refrigerators etc.
O Intermittent production system.
Intermittent production system is totally different than continuous
production systems. In this case, production specification varies from customer to
customer. For e.g. heavy manufacturer like Larsen & Tubro manufacture different
heavy machines required by power sector, petroleum refinery, etc.
There are two major classifications of intermittent production system:
Job shop systems: In job shop production systems, each product is
totally unique. Each customer orders a special product to suit his or
her application. An example of Rolls-Royee cars and Larsen & Tubro
fall in this category.
Batch processing system: In this there is a very large product mix
offered to customers. To satisfy large number of different types of
customers, many products are manufactured. Products are different
but are of similar nature.
59
ASFA
From the above theory, it is clear that company falls in batch manufacturing
category because it manufactures various types of diagnosis kits. Also certain
sicknesses are non-seasonal like diabetes, cancer, aids etc. for which company
have to manufacture medicines regularly throughout the year. Many other
sicknesses are seasonal like malaria, gondeas, etc. for which company has to
increase production during particular season. So, company offer many large
product mix to their customers. Every month they manufacture different set of
products. They undertake batch wise production of different products one after
another.
Analysis of Plant location
Plant lay-out is physical arrangement of various buildings, production
departments, technical utilities and location of various machines within each
production department.
Following factors decide types of plant lay-out. Factors affecting plant lay-out
design are:
1. What, how and how much to manufacture.
2. Government rules and regulation.
3. Cost of land
4. Number of employees, visitors and male-female ratio.
5. Provision for material handing.
6. Nature of production operations.
7. General factors.
Ayurvedic pharmaceutical company has to follow the general requirements
mentioned in Schedule M in Drug and Cosmetic Act. The following are the
things that are top kept in mind while doing the plant lay-out:
60
ASFA
Location and surroundings: Factory building shall be so
situated so as to avoid contamination from open sewage & area
or public lavatory or any factory which produces large quantity
of soot, dust or smoke.
Building: The building used for the factory shall be constructed
so as to permit production of drugs under hygienic condition
laid down by the factorys act 1948 (63 of 1948). The premise
used for manufacturing processing, packaging, labeling and
testing purposes shall be adequately provided with the working
space to allow orderly and logical placement of equipment and
material so as to control the possibility by other drugs and to
avoid the risk of mix up between different drugs with other
components.
Designed/constructed/maintained to prevent entry of
insects and rodents.
Provided with adequate lightening and ventilation and
if necessary air-conditioning in order to maintain
satisfactory temperature and relative humidity.
Provide with underground drainage system in
processing area as far as possible.
Water supply: The water used should be free from pathogenic
organisms.
Disposal of waste: it should be so that it doesnt have any
harmful effects on the health of people of surrounding area.
61
ASFA
Plant lay-out.
Plant lay-out is configuration of departments, work stations and
equipments in the production system or in the conversion process. Plant lay-out is
the arrangement of machinery, equipment and facilities such as receiving and
shipping department, tools room, maintenance room, inspection cabin, stores,
trolleys, drums and container and other handling equipments, employees amenities
like canteen, rest and change room, toilet, parking facility etc. so as to ensure
smooth and quick moment of material from raw-material stage to finished product
stage with minimum material handling, quality of operation, good communication
etc. at the lowest possible handling cost.
Depending upon nature of business, variety of finished products and
type of machines, design of plant lay-out shall vary. The arrangement of machines
in one department and arrangement and sequence of various departments shall
also vary. Because of this reason, organizations are seen working with any of the
following type of plant layout:
1. Process lay-out.
2. Product lay-out.
Line processing type(Assembly type)
Continuous flow type.
62
ASFA
3. Combination lay-out (Hybrid lay-out).
4. Cellular lay-out.
5. Fixed position lay-out.
6. Service lay-out.
The plant lay-out of ASFA is cellular lay-out type where machines and
equipments are arranged according to manufacturing process.
63
ASFA
Plant lay-out of ASFA
64
ASFA
Where name of the rooms as per given below :
1. Production manager.
2. Ready made medicines room.
3. Granules department.
4. Tablet department
5. Churna packing room
6. Dhrut, oil, malam packing room
7. General packing room
8. Glass bottle room
9. Machine spare part room
10. Asav, aristh, sadhan room
11. Retail sample room
12. Packing material room
13. Bottle washing room
14. Liquid, semi-liquid filling room
15. Pills making, cutting and polishing room
16. Kharal, bhasma, bhavana section-1
17. Kharal, bhasma, bhavana section-2
18. Prohibated Asav making room
19. Quality control room
Dark room
Sterility testing room
Zidiper preparation room
Electronic equipment roon
20. Electrical panel board
21. General bhatti department
Oil
Dhrut
65
ASFA
Syrup
Avelha
22. Lpg room
23. D.M water plant
24. Bhatti, bhasma, put section-1
25. Boiler room
26. Ladies / gents toilet
27. Kachi dava korentine section
28. Reject goods section
29. Churna section
30. Raw material department
R.m1
RM2
RM 3
RM 4
31. Dispatch department
32. cow dung cakes and coal stores
Bhatti , bhasma,put section-2
33.
34. Water tank
35. Worker room ladies
36. Worker room gents
37. Board room
38. Security cabin
39. Parking stand
40. Boiler, chimney stock.
66
ASFA
67
ASFA
BRIEF IDEA ABOUT DEPARTMENTS AND MACHINES
Name of
the
departme
nt
Descripti
on
Machine in
that
department
Capacit
y of the
machin
e
Photo of the
machine
Grinding
Departme
nt
In this
departme
nt
received
raw
materials
are grind
with the
help of
machine
with
different
capacity.
4-big
edge
runner
made
from
granite
3-edge
runner
from
granite
2-edge
runner
made
from ss
316
1-edge
runner
from ss
316
70 kg
10 kg
20-25
kg
25-25kg
Bhatthi
departme
nt
For
making
pills and
tablets
Oven
SS
jacketed
vessel
200kg
500 kg
oven
68
ASFA
there are
machine
s like
jacketed
vassals,
pulp
machine
etc.
8 no. gas
burner
Pulp
making
machine
150 kg
Jacketed vessel
Pills
departme
nt
For pills
making,
cutting,
packing
Roller
ss-316
Stick
making
machine
ss-316
Pills
making
machine
Coating
pan
Granules
Single
rotary
machine
Double
rotary
machine
30
kg/hour
30
kg/hour
30kg/ho
ur
30kg/hr
80 kg/4
hr
20
kg/hour
40
kg/hour
Stick-pills machine
Pills machine
69
ASFA
Granulator
Powder
departme
nt
Making,
Filling
and
packing
of
powder
KC-15
KC-17
KC-22
Micro
machine
Powder
filling
machine
200kg/h
200kg/h
30 kg/hr
liquid
departme
nt
Filling
and
packing
of liquid
Fully
automati
c Liquid
filling
machine
Semi-
automati
c liquid
filling
machine
20lt/hr
70
ASFA
Powder
departme
nt
Making,
Filling
and
packing
of
powder
KC-15
KC-17
KC-22
Micro
machine
Powder
filling
machine
200kg/h
200kg/h
30 kg/hr
liquid
departme
nt
Filling
and
packing
of liquid
Fully
automati
c Liquid
filling
machine
Semi-
automati
c liquid
filling
machine
20lt/hrs
71
ASFA
Packing
departme
nt
Printing
label &
packing
Printer
Packing
machine
100
label/mi
n
Boiler
room
Hitting
raw
materials
Boilers -
72
ASFA
Records kept in production department
Raw material department:
Raw material inward register.
RM test request.
Daily balance calibration record.
RM status label.
RM stock card.
RM stock verification record.
Goods forwarding note.
Recall / return goods register.
Scrap register.
Supplier goods shortage registers.
Retest register.
House keeping register.
RM requisition slip.
BMR on line.
SOP.
Grinding department:
Process material inward register.
Machine Seq. log book.
BMR on line.
Product test report.
Process status label.
Inward register.
Process material outward register.
SOP.
Identification label.
73
ASFA
Bhatthi department:
BMR on line.
Product test report.
Inward register.
SOP.
Equipment status label.
In process record.
Dispatch department:
Finished goods inward register.
Dispatch challan.
Finished goods requisition note.
Goods forwarding note.
Excise invoice.
Finished goods stock register
Stock verification record.
Recall / return good register.
Status label.
Packing department:
74
ASFA
Status label.
BMR on line.
FG inward register.
Calibration / validation record.
Label stock register.
Label disposal register.
SOP.
Release order file.
Good forwarding note.
Bottle stock register.
Weight verification register.
Kharal / Pills /Tablets / Grannules department:
BMR on line.
Product test request.
Equipment status label.
Inward register.
Tablet weight variation register.
SOP.
In process record (Bhasma / Bhavna)
75
ASFA
Manufacturing process
All the finish products of ASFA can be divided in 6 main categories and here,
below we taken general production process in each category and process for
specific medicine in those categories. Also ASFAproduces 32 patent medicine.
Categories are as follows:
Category 1: rasa, rasayan, bhasma, parpati, pishti.
PRODUCTION PROCESS OF RASA (AROGYA VARDHANI RASA)
76
ASFA
PRODUCTION PROCESS OF RASAYAN (SUVARNAVASANTMALTI)
77
ASFA
PRODUCTION PROCESS OF PARPATI (PANCHAMRUT PARPARTI)
78
ASFA
PRODUCTION PROCESS OF PISHTI (PRAVAL PISHTI)
79
ASFA
PRODUCTION PROCESS OF BHASMA (SHANKH BHASMA)
80
ASFA
PRODUCTION PROCESS OF CHURNA (KUBERAKSH CHURNA)
81
ASFA
82
ASFA
3: Gugal vati, tablets, sogthi
PRODUCTION PROCESS OF SOGTHI (KUSTHHER SOGTHI)
PRODUCTION PROCESS OF GUGAL (TRIPHLA GUGAL)
83
ASFA
PRODUCTION PROCESS OF TABLETS (PUNARNAVA MANDUR)
84
ASFA
Category 4 : Avleh, Dhrith, Oil, Sharbat, Malam, Lep
85
ASFA
PRODUCTION PROCESS OF DHRITH (TRIPHLA DHRITH)
86
ASFA
PRODUCTION PROCESS OF OIL (BRAMHI OIL)
87
ASFA
PRODUCTION PROCESS OF MALAM (SINDURADI MALAM)
88
ASFA
89
ASFA
Category 5 : Asav, Aristh, Kwath(powder)
PRODUCTION PROCESS OF KWATH (DWATRIDHRASHANK KWATH)
90
ASFA
PRODUCTION PROCESS OS PATENT MEDICINES (SPL.GULKHAND)
91
ASFA
TYPES AND CLASSIFICATION MATERIAL HANDLING
Material handling is defined as controlled movement of material, from receipt,
through storage and production and up to the shipment of finished product. As
definition suggests it is concerned with storage and internal movement of following
type of material.
Raw material
Work-in-progress inventory
Finished product
Surplus and waste
Capital equipments
ASFA used only solid and liquid raw material. So material handling equipments of
ASFA as per the given below:
Name of the
equipment
Function Photo
Drums For storage and
transportation of
liquid material
92
ASFA
Carats For transportation of
solid material and
wastage
Trolley For transportation of
solid material and
wastage
93
ASFA
INVENTORY CONTROL SYSTEM
Inventory control is the means by which material of the correct quality and
quantity is made available as and when it is required with due regard to economy in
the storage costs, setup costs, manufacturing costs, purchase prices and working
capital.
As inventory is an essential part of any organization. Systematic management
and control of inventory for all the items is a challenging job. ASFAs main
objectives of inventory control are:
1 To maintain investment in inventory at the lowest level
1 To supply the products to its user as per their requirement at right time.
1 To keep inactive, waste, scrape and obsolete items at the minimum level.
1 To minimize holding, replacement and shortage cost of inventory at minimum
level.
1 To maximize the efficiency in production.
INVENTORY UNIT
Inventory unit shows the unit, which is explained in kilo gram, liter, meter etc.
ORDER CODE
Order codes represent the following results if items are 0, 1, 29.
0 = for firm planning of main items, which are to be dispatched without any
further process (final products)
1 = for manual planning, material requirement planning off switch for case: the
item is in short but similar item with some another code is available in stock. It is
planning can be stopped off.
2 = material requirement planning on switch for the item.
3 = material requirement planning on with instruction to check and plan for sales
order requirement.
94
ASFA
4 = reserved for EDP department to freeze the planning released and to keep the
action in abeyance for one or another reason.
BYPASS CODE
Bypass code denotes 0 is for component and 1 is for phantom items. Bypass code
is used to bypass the item for convenience.
INSPECTION CODE
Inspection code denotes Y/N i.e. yes or no whether the item to be inspected or not.
ASFA usually check the entire item in B.M; hence, it is always Y.
SCRAP
Scrap means the waste of material arising during manufacturing process. Scrap
found in ASFA Company in the last 5 year and hence, it has to purchase material
in excess. It is 10% of purchased raw-material as per last five years record.
WEIGHT
This is always in kgs indicating net or gross weight that is suppose any item is
packed. The gross weight of item is equal to net weight + weight of box.
NET WEIGHT= GROSS WEIGHT BOX WEIGHT.
FIX LOT
It refers to single character Y/N- for specifying whether the order to be released for
a single lot or not.
EX: Lot is 500 and order quantity is 2500. If Y is given MRP will print 5 lines and if
N is given then it will print in a single line for a single order and single schedule
time.
95
ASFA
# LEAD TIME
For making any job available the company has to release the order to vender then
after the vender will take a sometime to deliver the material. Finally the material will
be inspected and will be made available at work place. The total time taken is called
Lead Time. This is always in weeks.
# LOT SIZE
Lot size is the quantity of order at which the total ordering cost and inventory
carrying cost will be the minimum. Lot size decided on the following basis.
1 Requirement for a specific time span.
1 Economic order quantity calculated based on cost of production and
requirement.
1 Minimum order quantity specified by vender.
1 Fix packing offered by supplies etc.
The company has to define lot size in relevant unit of measuring such as box,
packet, liter or tones. EX: The company need 70 units of leaning but the supplier
does not supply less than 100 units so that size will be 1 box = 100 leanings.
# SAFETY STOCK
It is the stock or inventory maintaining to meet unforeseen situation such as
variation in demand, variation in supply of quantity by supplier and variation in lead
time of supply etc. so it use in emergency.
# ACCUMULATED LEAD TIME
It is the total time taken in procuring the time after identification of its need and
releasing orders. (From placing to receipt of the item)
96
ASFA
STOCK
There are several types of stock which are explained below.
1. Vender stock: vender stock has two type of stock. First is the labour and
other is repairing. Some items are given to vender for repairing are known as
repairing stock.
2. Store stock: The items, which have been stored by the company, are known
as store stock.
3. Repairing stock: some items are given for repairing because of, it may store
from long time or may be for any damage or corrosion is called repairing
stock.
4. Short stock: The stock, which is in short, is called short stock and negative
sign defines it.
5. Committed quantity: Committed quantity is the quantity, which is issued
against work.
6. Available quantity:
Available order = floor stock + store stock + repairing stock (short stock +
committed quantity).
7. Sales order quantity: the quantities, which are issued against sales
order is known as sales order quantity.
8. Order quantity: the order quantity is the sum of purchase order and
work order quantity.
ORDER QUANTITY = PURCHASE ORDER + WORKING ORDER.
9. Indent quantity: The item is in short and the work order has been
Made. After the purchase item has to be made and purchase that item
97
ASFA
From vender, this quantity known as indent quantity.
INVENORY VALUATION METHODS
Materials are issued to the different jobs, works, and orders from the store. The
cost of finished product largely depends upon the price changed for raw-material
issued to the jobs. Various methods are used for inventory valuation, which will
solute with industry condition. The methods of inventory valuation are as follows:
1. FIFO method (first in first out)
2. LIFO method (last in first out)
3. HIFO method (highest in first out)
4. Average cost method
5. Market price method
6. Standard cost method
7. Base stock method
ASFA use FIFO method for inventory valuation.
98
ASFA
ABC ANALYSIS
Abc analysis is analysis according to the value of items. In ASFA, the inventory
consists of hundreds of items and many employee are controlled them. For this
company do lot of expenses. In order to affect economy in controlling such large
inventory ASFA use a system known as ABC (Always Better Control) analysis.
It has been found from the experience that all items included in inventory are not of
equal importance. A few items in the inventory represent a large proportion of total
value of inventory. Hence, more attention must be devoted to the control of such
items. All the items are divided into three categories.
A Category
It includes those items which are very important and of high value but forms only a
small proportion of total quantity of inventory.
In ASFA, there are around 10 items which are comes in category A and they
represents as much as 74% of value of inventories. Strict control over receipt,
storage and issue should be exercised over these items. Items included in this
category are gold, silver, affin, saffron, volatile oil like clove oil, sendamon oil,
eucalyptus oil etc.
B Category
Items included in category B are not as important as those in category A, but are
important enough for its proper records to be maintained. They constitute 70 items
of total number of items, but represent 18% of total value of inventory of ASFA.
These items are:
Minerals Herbal items
Mercury Cinnamon
Copper Tamal patra
Zinc Jayfale
Lead Javantri
99
ASFA
Abharakh Cardamom
Suvarna makshika Clove
Iron Salam panja,
C Category
The remaining items must be placed in category C. they are not so important form
the view point of maintaining control over the receipt and consumption such items
constitute 65% of the total number of items but they represent 8% of total value.
ABC analysis of ASFA
Category No. of items(in % of
total number of items)
Value of items ( in % of
total value of
inventory)
A 10 74
B 25 18
C 65 8
100
ASFA
VED ANALYSIS
The possible consequences of material stock outs when demand arises from the
basis of VED analysis. The cost of shortage depends upon the seriousness of the
situation. Items are grouped as V (Vital), E (Essential) and D (Desirable).
This classification of inventory is based on importance and application of different
items in production process. According to this classification there are three
categories of item VED.
Vital items are those items without which production will instantly stop. All raw
materials are vital items. Similarly, there can be some another low value items
which are absolutely necessary for production process. As explained above, spar
parts of machines like power generator or boiler become vital items. Also electricity
comes under this category.
Essential items are those items without which efficiency of production process will
reduce. Absence of these items may not cause total stoppage of production but rate
of production may go down. The items included in this category are material
handling equipments like trolley, drums and karats. However it is always possible to
do manual handling but rate of material may slow down. Also packing and sealing
machines comes under this category as without this production can be carried out
but rate of movement of goods slow down as it is also a part of production process.
Desirable items are those items, without which production may not stop instantly
nor it will slow down but there may be inconvenience in manufacturing. This
category includes safety items and auxiliary items.
101
ASFA
DIFFERENT RECORDS KEPT IN STORE
Store Inward Receipt
M/S.________
_________
Vehicle no. _______
GR./RR. NO. ______ Date :
Transporter _______
Challan no. _______
Date _______
Indent no. _______
Sr.
No.
Description of
material
uni
t
Qty.as
per
challan
Short
quantity
Received
quantity
Rejected
quantity
Quantity
Accepted
Inspection report
No. __________
Bought of : Purchase order no. _____________-_
Material receipt no. : ______________
STORE RECORD AND FUNCTION
Item
no.
Code
no.
Particulars Quantity
on order
Quantity
received
Period Rejected remarks
102
ASFA
STORE RECORD AND FUNCTION
In ASFA, they use store ledger and bin system for store records. Store ledger is
stock record which shows the receipts, consumption and balance of raw material
both in qualities and values-store accounting. Bin card is maintained by store
keeper it records quantities only issue and receipts. Bin card can contained material
received but awaiting inspection, name of suppliers, unit cost of items, cost of total
inventory carried.
There are some daily functions of store department are as follows:
The quality and quantity of goods or raw material is checked before store
Classification and coding of material store keeper give different code to different
material.
Materials are kept in bins, racks etc. for each kind of material separate records is
maintained.
Materials are issued against the materials or store requisition.
They use FIFO system for material issue and material is checked before issue.
A review of the existing condition of material or goods shall be done once in six
months.
Records keeping of materials
103
ASFA
MATERIAL RECEIPT PROCESS
In ASFA, there is systematic process for material receipt as follows.
1 The first step is purchase order given by company to suppliers.
1 When material comes it is not directly sent to store department but it is given fore
quality checking.
1In ASFA, there is one laboratory to check the quality of materials.
1 They are checking the quality of goods and compare with quality of sample which
is given by suppliers.
1 If there is any discrepancy, it should be immediately reported to the purchase
department and that goods are sent to rejected goods department.
1 Rejected goods department take necessary action for the return of goods to
suppliers.
1 If the goods are of quality, receiving section will prepare a goods receive note.
Four copies of the note are prepared and three copies are sent to the store keeper
along with the goods received and they attach green color accept card with
materials.
1 Received material is store in various containers by store department and issue
when they get order.
104
ASFA
MATERIAL ISSUE PROCESS
In ASFA, there is a simple and short process of material issue. It is as follows.
1 Received material store in different container, in different quantity, by store
department.
1 When production department need material, production manager is make a report
of required material and send to store department.
1 Store department check the availability of material. If require material is available,
they send it for quality checking to quality control department.
1 If quality is acceptable, they send report of it to store department.
1 After this, store manager take the material which is require and send for cleaning
that material.
1 At the last the cleaned material is send to purchase department with entry in
material outward book.
105
ASFA
DOCUMENTS OF PURCHASING
Purchase request
ASFA pharmacy Ltd.
Surat.
Request for quotation
Tender no. .
Date .
To,
(Name and Address of Supplier)
Sir,
Please let us have your best offer for the supply of the following items. The items should be
delivered F.O. R. Surat. The tender closes on (date) at (time) and will be opened at (time) on
the following day. The first copy of tender should be dispatched to us duly filled in before
the close of the tender.
Serial no. Description of
Items
quality quantity Terms of delivery
Your faith fully,
For ASFA pharmacy ltd.
Purchase officer
106
ASFA
Comparison statements
ASFA Pharmacy
Surat
Comparative statement of quotations
Tender no Opened on
Name of material
Serial no Name of
supplier
quantity price Duties and
taxes
Terms of
delivery
remarks
Entered by. Checked by.
107
ASFA
PURCHASE PROCESS
The process describes the sequence of steps leading to the completion of an
identified specific task. Thus, purchasing process describes the sequence of steps
by which purchase function is carried through from its inception to it completion. The
steps of process are as follows
A) Receive requisitions
The requisition includes information like how many items wanted, when they should
be available, quantity in hand, who is making the request etc.
In ASFA, who requires raw materials or other things, they give purchase
requisition slip to production department.
B) Review requisitions
The review of requisition is necessary. This is done to answer questions like:
(1) Can a less expensive material serve purpose?
(2) Can it be eliminated?
(3) Can another item serve the same function?
(4) Can a supplier reduce price by revise specification?
C) Select suppliers
ASFA is co-operative pharmacy and for purchase they invite quotation from
various suppliers. After getting quotations and by comparing them ASFA select the
suppliers. ASFA is not giving so much important to price but give important to
quality.
D) Place orders
108
ASFA
Orders are placed to selected suppliers. For order placing to selected suppliers,
ASFA prepare a purchase order and send to suppliers. Purchase order includes
specific quantity and quality of material at stipulated terms and material send period
and placed mentioned in it.
E) Monitor orders
If placed order is for long time then it is necessary to monitor those orders. ASFA
also monitor these types of orders because lengthy orders are checked to
determine whether anticipated deliveries are on schedule.
F) Receive orders
The purchase transaction is complete only after receiving the order quantity in an
acceptable condition. When material is comes in ASFA, it is checked for quality in
ASFAs laboratory. If qualities acceptable then only material is send to store
department with material inward receipt.
ASFA Ayurvedic Co-operative Pharmacy
Near Panini taki, Varachha Road,
Surat-395006
Phone no: 648092, 644410
PURCHASE ORDER
Purchase Order No:
Supplier Quotation:
TO: No. & Date:
Please supply the following items on the terms and condition mentioned below.
Sl No Description Material
code
size Qty. Price Amount Delivery
date
Terms of delivery..
For ASFA Pharmacy
Purchase Manager
109
ASFA
PURCHASE REQUISITION FORM
ASFA AYURVEDIC CO- OPERATIVE PHARMACY
Near panini taki, Varachha road,
Surat-395006
Phone no : 648092, 644410
Sr. no. Date:
Material
code
Description Size Qty Job/dept Delivery Purchase order
Date Price No. Rate Supplier

Authorized Signature
110
ASFA
Maintenance planning
Machineries experience wear & tear and hence they need servicing. One
unscientific way is to repair machines only when give some wrong symbols like
excess noise, vibration, more power / fuel consumption, deterioration in quality,
accidents, complete shut-down etc. This non scientific maintenance at regular
intervals.
ASFA follows preventive maintenance. The maintenance planning is as per below:
1
st
week of month
Sr. no Room no. Name of the
machine
Type of the
maintenance
1 23 Boiler Cleaning of oil
filter & all type of
pipes.
2 21 R.O system Cleaning of full
R.O plant
3 26 Ghanti department Cleaning of micro
pulverizer &
servicing of
bearings.
2
nd
week of month
machine
Type of the
maintenance
1 14 Kharal Greasing of
bearing, templon
wahing of both
service roller
2 13 Pills making
machine
Replacing older V
belt with new V
belt & servicing of
motor
3 13 Stick making
machine
Oiling & greasing
of machine
4 13 roller Oiling of machine
111
ASFA
3
rd
week of month
machine
Type of the
maintenance
1 4 Tablet compressor Cleaning of
service motor & V
belt.
2 12 Liquid filling
machine
Washing &
cleaning of filling
pump & pips
3 12 Semi-solid filling
machine
Washing of filling
pump.
4
th
week of month
machine
Type of the
maintenance
1 7 Label printing
machine
Washing &
cleaning of
machine, greasing
of different parts
2 12 Filter machine Washing &
cleaning of filter
3 30 dryer Cleaning &
washing of dryer
machine, checking
of power supply of
heater.
112
ASFA
QUALITY CONTROL
Quality is measure of characteristic of a product or service which impart it
functional or aesthetic value so as to satisfy the needs of and users for a given price
paid by them.
Quality control is a system of policies, procedures and guidelines which
established and maintained the specific standard of quality. It includes all aspects of
quality such as design parameters, inspection, measurement and analysis of
current quality levels, future trends and also competitors quality level, feedback
from field performance of quality, choice of machines, tools, processes etc.,
selection and training of production and inspection staff, corrective actions and
follows up etc.
Asfas objective of quality control
Asfas main objective is to produce cost effective quality ayurvedic medicine.
The other objectives are as follows:
= To give qualitative products to customers
= To see whether the medicines are confirms to pre-determine standers.
= To reduce wastage
= To develop quality consciousness
= To assess the quality
113
ASFA
QUALITY CONTROL SYSTEM IN ASFA
Asfa checks the quality of product at all three levels i.e. quality checking of
raw materials, quality checking of work in progress and finished goods.
Raw material
In this stage, raw materials are being checked and compare with specified quality or
order placed. If quality of raw material is not satisfactory, goods will be rejected. If
acceptable, report is send to store department. Usually they take 25 gm of raw
material for quality checking.
In process goods
Asfa also check the quality of goods during the process of production if, there is any
problem in quality while processing, it can remove by taking corrective actions and
make qualitative medicines for customers. These types of checking record are kept
in standard verification. 10 gm is taken for quality checking at work in progress
level. Also sample size depends upon the volume of production. For bulk production
more samples are taken. For costly and small production volume less samples are
taken.
Finished product
When product are finished its process then from them some samples are send to
quality control department for quality checking and if quality is accepted then only
finished product give to packing department for packing and labeling. The document
is used to keep these types of records is called Finished product report.
114
ASFA
Process of quality checking of products in different category.
Churna.
Test
Description
Identity
Macroscopic
(Structure, color, odor, taste)
Microscopic
( Cells, starch content, oil content)
TLC
( Thin Layer Cometography)
Purity
Total ash
Acid Insoluble Ash
Loss on drying
Impurities
Strength
Water soluble extract
Alcohol soluble extract
Other test
PH test ( PH value)
Tablet.
Test Description
Identity Macroscopic
Hardness -
Disintegration time -
Average weight -
Other test Ph value
Purity
Total ash
Acid Insoluble Ash
Loss on drying
Strength Water soluble extract
Syrup.
115
ASFA
Test Description
Gravity
TLC
(Thin layer camotography)
Total sugar
Total dissolve solid
Loss on drying
Soghti
Test Description
Purity
Total ash
Acid Insoluble Ash
Loss on drying
Strength Water soluble extract
116
ASFA
Equipments used in quality control department
Name Capacity Photos
Adventure electronic
balance
0.001 gm to 210 gm
Labo microscope 4X,10X,45X
117
ASFA
Suswox microscope 5X,10X,45X
Tablet disintegration
test apparatus
12 tablets
Centrifuge 4 tube,1200RPM
118
ASFA
Hot plate 100 c
Oven 250 c
Willy grinding mill -
119
ASFA
Refractometer(portable
)
0-32
PH meter (systronic) 0.0-14.0
UV chromatographic
inspection cabinet
-
Apparatus for volatile
oil determination
One liter
Distillation apparatus Two liter
Hans filter colorimeter 420 mm-660 mm
120
ASFA
Spectro colorimeter 400 mm-700 mm
Polarimeter 220 mm
Muffle furnace 930 c
Tablet hardness tester 20 kg/cm 2
Digital thermometer 900 c
Hygrometer 0-100 %
Thermometer mercury
in glass
0-360 c
Viscometer Size-350
Lactometer -
Total dissolved solid
meter
0 PPM to 1000 PPM
Hydrometer 0.700 to 2.000
IR moisture balance 5 gm
Thin layer
chromatography set
-
Documents related to quality control department
Sample inward register
In process testing record
Material request form
Solution preparation record
Equipment status table
Inward register
Identification label
Complain sample testing record
Calibration / validation record
RM specification
PM specification
FG specification
SOP (Standard Operating Process)
Retain sample record
Working standard sample
RM testing record
PM testing record
FG testing record
121
ASFA
RM retesting record
Retain sample disposal record
QC Sample disposal record
Stability study record
Raw material order sample record
Water testing record
FINANCIAL MANAGEMENT
122
ASFA
Introduction
Finance and accounting department is the blood of any organization. Without
it no organization can survive. It is the finance department responsible for the
ascertainment of the requirement of funds and makes them available on time for the
123
ASFA
organization so that it can be invested in revenue generating activities. It also
manages all the cash inflows as well as outflow.
Financial management provides a conceptual and analytical framework for
financial decision making. The finance function covers both acquisitions of funds as
well as their allocations. Thus, apart from the issues involved in acquiring external
funds, the main concern of financial management is the efficient and wise allocation
of funds to various uses. Defined in a broad sense, it is viewed as an integral part of
overall management.
The scope of financial management, i.e. the views about finance functions
has undergone remarkable changes over time. Till 1950, finance function was
regarded as the function only of raising finance for business, and sources of finance
but now, an efficient and effective utilization of finance is also been considered as
an important function of financial management.

124
ASFA
Organization structure of finance department.
125
ASFA
Revenue & capital budgeting.
The investment decision relates to the selection of the assets in which funds
will be invested by a firm. The assets which can be acquired fall into two broad
groups:
1. Long term assets which yield the return over the period of time in future.
2. Short term or current asset, defined as those assets which are convertible
into cash without diminution in value, usually within a year.
The first of these involving the first category of assets is popularly known in
financial literature as capital budgeting. Capital budgeting is probably the
crucial financial decision of a firm. It relates to the selection of an asset or
investment proposal or course of action whose benefits are likely to be available
in future over the lifetime of the project.
ASFA is a co-operative pharmacy and it does work with the objective of
earning profit. ASFA do not prepare revenue and capital budget. But if company
prepares it then it is useful to them in following ways:
Revenue budgeting is beneficial as it encourages cost consciousness,
ensure discipline in operations, better analysis of financial statements,
detection of deficit areas, better co-ordination of departments, periodic
evaluation of plans, timely improvement in profit plans etc.
Capital budgeting affects the profitability of the firm in the long run. Capital
expenditure decision has its effect over a long time span and inevitably
affects the companys future cost structure. Capital investment involves costs
and majority of the firm have scarce capital resources./ this underlines the
need for thoughtful, wise and correct investment decisions as an incorrect
decision.
126
ASFA
Costing Methods.
The methods to be used for the ascertainment of cost of production differ
from industry to industry. It primarily depends upon the manufacturing process and
also on the methods of measuring the departmental and finished products.
There are various methods of costing are as follows:
= Job costing
= Contract costing
= Batch costing
= Process costing
= One operation costing
= Service costing
= Multiple operations costing
Asfa use batch costing and multiple operation costing methods. Asfa use
these methods because Asfa produce its products in batch and multiple operations
are taken at a time in Asfa.
A batch may represent a number of small orders passed through the
pharmacy in batch. Each batch is treated as a unit of cost and separately coasted.
The cost per unit is determined by dividing the cost of the batch by number of units
produced in a batch.
Multiple operation method of manufacturing consists of a number of distinct
operations. It refers to a cost of converting the raw material into finished goods.
Pharmacy also considers the rejections in each operation also for costing of
products.
127
ASFA
COSTING STRUCTURE OF ASFA
128
ASFA
COSTING SHEET OF ASFA
Particular Amount Amount
Raw materials
Opening stock
Add: purchasing
Less: closing stock
Labour
Direct expenses
Prime cost
Factory overhead
Factory expenses
Fuel and power
Carriage inward
Indirect wages
Depreciation and repairs
Rent and taxes
Insurance
stationary
Works cost
Office and administration overheads
Office expenses
Director fees
Rent, rates
Office salaries
Sundry expenses
Stationary
Depreciation of office furniture
Office cost
Selling and distribution expenses
Travelers expenses and salaries
Packing expenses
Stationary
Bad debt
Cost of sales
profit
Selling price
WORKING CAPITAL MANAGEMENT
Basically there are 2 types of capital need which comprises the following
129
ASFA
= Fixed capital, that is, to investing fixed assets which tend not to
vary in short term. Tend only to be volatile when major
investment decisions are made. For ex: when assets are
purchased or sold and
= Working capital on the other hand is much more fluid and
fluctuates with the level of business. The working capital cycle
links directly with the cash operating cycle. It comprises of short
term net assets.
Working capital is also known as revolving or circulating or short term capital.
The term working capital refers to that part of capital which is not tied up in
fixed assets but is used to meet the day-to-day requirements of business, which
changes from day-to-day, and which is converted into cash continuously.
Working capital management includes the management of
1 Working capital finance
1 Management of receivable
1 Management of inventory
1 Management of cash
WORKING CAPITAL FINANCE
Asfa uses the sources for working capital are as follows:
1 Long Term Sources of Working Capital
= Equity shares
= Preference shares
= Long term loan
130
ASFA
1 Short Term Sources of Working Capital
= Short term loans
= Bank overdraft
= Trade credit
= Commercial papers
MANAGEMENT OF RECEIVABLES
Receivables are assets accounts representing amount owed to the firm as a result
of sale of goods in the ordinary courses of business.
Management of receivables is depending upon the credit policy of company. Asfa
has the credit policy as under.
C Asfa has too strict or too liberal credit policy
C Asfas credit standards are clearly specified in policy and strict for customers
C Asfa give cash discount on bulky purchase
C Asfa give goods only on one month credit period.
C Asfa timely collect and get its receivables
MANAGEMENT OF INVENTORY
Inventory control means the decision of the firm as to the extent to which
inventories can be economically stored.
Asfas main objectives of inventory control are:
1 To maintain investment in inventory at the lowest level
1 To supply the products to its user as per their requirement at right time.
1 To keep inactive, waste, scrape and obsolete items at the minimum level.
131
ASFA
1 To minimize holding, replacement and shortage cost of inventory at minimum
level.
1 To maximize the efficiency in production.
MANAGEMENT OF CASH
Cash is the medium of exchange which allows management to carry on the various
activities of the business on day to day basis.
Cash management involves the following four factors:
= Ascertainment of the minimum cash balance and controlling the level of cash
= Controlling cash inflows
= Controlling cash outflows
= Optimum investment of surplus cash
132
ASFA
Statement showing changes in working capital.

Particulars 2008 2009 Effect on working
capital

Increase Decrease
Current assets

Debtors 857967.39 608666.21 249301.18
Closing stock 4638544 6424357 1785813
Loans and advances 869473.62 1013400.62 143927
Cash and bank balance 4219683.04 2777780 1441903.04

Total current assets 10585668.05 10824203.83

Current liabilities

Total current liabilities 5194425.26 6022119.79

827694.53

Total current liabilities 5194425.26 6022119.79 1929740 2518898.75

Working capital 5391242.79 4802084.04

Change in working capital 589158.75 589158.75

133
ASFA
RATIO ANALYSIS
A ration is only a comparison of the numerator with the denominator. The
term ratio refers to the numerical or quantitative relationship between two figures. A
ratio is the relationship between two figures, and obtained by dividing the former by
the latter. Ratios are design to show how one number is related to another.
Ratio analysis is an important and age old technique of financial analysis.
The data given in the financial statement in absolute form are dump and are unable
to communicate any thing. Ratios are relative form of financial data and very useful
technique to check upon the efficiency of a firm.
Ratio analysis is extremely helpful in providing valuable insight into a
companys financial picture. Ratio normally pinpoints a business strength and
weakness.
134
ASFA
CURRENT RATIO
CURRENT RATIO = CURRENT ASSETS
CURRENT LIABILITIES
YEAR CURRENT
ASSETS
CURRENT
LIABILITIE
S
CURRENT
RATIO
2006-
2007
12003798.17 6113227.78 1.96:1
2007-
2008
10585667 5194425.26 2.04:1
2008-
2009
10824203.83 6022119.79
1.80:1
Interpretation:
CURRENT RATIO IS ALMOST STABLE WHICH SHOWS THAT THE RATIO IS
SATISFACTORY AND CURRENT ASSETS ARE SUFFICIENT TO MEET
CURRENT LIABILITIES AND THE COMPANY SHOULD NOT DEPEND UPON ITS
LONG TERM SOURCES TO PAY ITS SHORT TERM LIABILITIES.
135
ASFA
QUICK RATIO
QUICK RATIO = LIQUID ASSETS
LIQUID LIABILITIES
Years LIQUID
ASSETS
LIQUID
LIABILITIES
QUICK
RATIO
2006-
2007
7545628.1
7
6113227.78 1.23:1
2007-
2008
5757048 5194425.26 1.11:1
2008-
2009
4246233.83 6022119.79 0.71:1
Interpretation
QUICK RATIO Is DECRESING WHICH SHOWS THAT THE RATIO IS
SATISFACTORY AND THE ASSETS CAN BE CONVERTED INTO CASH
PROMPTLY OR VERY SHORTLY.
136
ASFA
PROPRIETORY RATIO
PROPRIETORY RATIO = SHAREHOLDER FUNDS
TOTAL ASSETS
Years SHARE
HOLDER
FUND
TOTAL
ASSETS
RATIO
2006-
2007
6488481.85 27964642.38 0.23:1
2007-
2008
10529652.69 28280199.24 0.37:1
2008-
2009
11123465.01 30637608.42 0.04:1
INTERPRETATION
IDEAL RATIO IS 1:3 THIS RATIO SHOWS THE GENERAL FINANCIAL POSITION
OF THE COMPANY.ASFASPROPRIETORY RATIO INDICATES POSITIVE
FEATURES AS IT PROVIDES SECURITY TO CREDITORS.
137
ASFA
FIXED ASSETS TO PROPRIETORY FUND RATIO
FIXED ASSETS TO PROPRIETORY FUND RATIO
= FIXED ASSETS
PROPRIETORY FUNDS
Years FIXED
ASSETS
PROPRIETORY
FUND
RATIO
2006-
2007
15267381.21 6488481.85 2.52:1
2007-
2008
15631191.21 10529652.69 1.48:1
2008-
2009
16143097.71 11123465.01 1.45:1
INTERPRITATION
FIXED ASSETS TO PROPRIETORY FUND RATIO IS 1.45:1 WHICH INDICATES
THAT ASSETS HAVE BEEN MAINLY FINANCED BY OWNERS FUNDS.
THE EXTENT OF COVERAGE OF THEIR DEBT IS COVERED BY ASSETS.
138
ASFA
LONG TERM FUND TO FIXED ASSETS RATIO
LONG-TERM FUND TO FIXED ASSETS RATIO
= LONG-TERM FUNDS
FIXED ASSETS
Years LONG
TERM
FUNDS
FIXED
ASSETS
RATIO
2006-
2007
6488481.85 15267381.21 0.42:1
2007-
2008
10529652.69 15631191.21 0.67:1
2008-
2009
11123465.01 16143097.71 0.69:1
INTERPRETATION
LONG TERM FUND TO FIXED ASSETS RATIO OF THE COMPANY IS
AONTINOUSLY INCREASING WHICH SHOWS THAT COMPANY BELIEVE IN
INVESTED MORE IN FIXED ASSETS RATHER THEN OTHER LONG TERM
SOURCE.
139
ASFA
GROSS PROFIT RATIO
GROSS PROFIT RATIO = GROSS PROFIT*100
NET SALE
Years GROSS
PROFIT
NET SALES RATIO
2006-
2007
10768977.15 32114099.52 33.53 %
2007-
2008
8236843.27 27923202.61 29.50%
2008-
2009
9270729.45 31035637.60 29.87%
INTERPRETATION
IN COMPARISION TO 2007 PERFORMANCE
2008 & 2009 GROSS PROFIT RATIO IS ALMOST STABLE WHICH DETERMINED
STABILITY IN COST OF PRODUCTION OR DIRECT EXPENSES OR SALE AT
REASONABLY GOOD PRICE.HIGHER G.P.R IS ALWAYS A GOOD SIGN.
140
ASFA
DIRECT OPERATING RATIO
DIRECT OPERATING RATIO= COGS*100
NET SALES
Years COGS(COST
OF GOOD
SOLD)
NET SALES Ratio
2006-
2007
8970357.05
32114099.52
27.93%
2007-
2008
8807836.95 27923202.61 31.54%
2008-
2009
10728485.12
31035637.60
34.57%
INTERPRETATION
IN COMPARISION TO 2007 PERFORMANCE OF 2008 & 2009 FOR DIRECT
OPERATING RATIO IS 34.57% WHICH DETERMINED LOVER EFFICIENCY
BECAUSE A 34 % PART OF SALES IS EATEN UP BY DIRECT OPERATING
COST.
141
ASFA
NET PROFIT RATIO
NET PROFIT RATIO = NET PROFIT*100
NET SALES
Years NET PROFIT
AFTER TAX
NET SALES RATIO
2006-
2007
834069.33
32114099.52
2.60%
2007-
2008
651221.04 27923202.61 2.33%
2008-
2009
632510.59
31035637.60
2.04%
INTERPRETATION
IN COMPARISION TO 2007 PERFORMANCE 2008 & 2009, NET PROFIT RATIO
HAS INCRESED TO 2.04% WHICH DETERMINED THAT THE PERFORMANCE
OF THE MANAGEMENT IS APPRECIATED AND PLUS POINT REINFORCED AS
PER THE STRUCTURE OF CO-OPRATIVE.
OPRATING RATIO
142
ASFA
DIRECT OPERATING RATIO= TOTAL OPRATING EXPENSE
NET SALES
Years TOTAL
OPRATING
EXPENSE
NET SALES RATIO
2002-
2007
22813929.62 32114099.52 71.04%
2003-04 29298513.54 27923202.61 104%
2004-05 23164568.48 31035637.60 74.68%
Interpretation:
In comparison to 2007 the ratio has been increased but it not good for the company
as large part of sales is eaten up by operating expenses.
143
ASFA
INVENTORY TURNOVER RATIO
INVENTORY = COST OF GOODS SOLD
TURNOVER RATIO AVERAGE INVENTORY
Years COGS AVG.INVENTORY RATIO
2006-
2007
8970357.05 4700956 1.91
TIMES
2007-
2008
8807836.95 4872088.5 1.81
TIMES
2008-
2009
10728485.12
5906293.5
1.82
TIMES
144
ASFA
AVERAGE INVENTERY HOLDING PERIOD
Years NO.
OF
DAYS(
A)
INVETORY
HOLDING
PERIOD(B
)
PERIOD(A/B)
2006-
2007
360 1.91 188 DAYS
2007-
2008
360 1.81 199 DAYS
2008-
2009
360 1.82 197 DAYS
INTERPRETATION
IN COMPARISION TO 2007 PERFORMANCE 2008 & 2009 STOCK TURNOVER
RATIO HAS ALMOST STABLE WHICH SHOWS THAT THE STOCK IS NOT
BLOCKED AND EFFICIENCY OF THE MANAGEMENT.
145
ASFA
DEBTORS TURNOVER RATIO
DEBTORS TURNOVER
RATIO = NET SALES
AVEREAGE DEBTORS
Years NET SALES DEBTORS RATIO
2006-
2007
32114099.52 488592.54 65.73
DAYS
2007-
2008
27923202.61 857967.39 32.55
DAYS
2008-
2009
31035637.60
608666.21 50.99
DAYS
146
ASFA
AVERAGE COLLECTION PERIOD
Years NO . OF
DAYS (A)
DEBTORS
RATIO (B)
PERIOD
(A/B)
2006-
2007
360 65.73 5.47
TIMES
2007-
2008
360 32.55 11.06
TIMES
2008-
2009
360 50.99 7.06
TIMES
INTERPRETATION
IN COMPARISION TO 2007 PERFORMANCE, 2008 DEBTORS TURNOVER
RATIO HAS INCREASED TO 6 TIMES WHICH INDICATES THAT DEBTS ARE
COLLECTED QUICKLY AND ALSO REFLECTS THE EFFECTIVENESS OF THE
CREDIT SALES POLICY OF THE MANAGEMENT.
147
ASFA
CREDITORS TURNOVER RATIO
CREDITORS TURNOVER
RATIO = NET PURCHASE
AVERAGE CREDITORS
Years CREDITORS PURCHASE RATIO
2006-
2007
1629185.83 8444784.05 5.18
DAYS
2007-
2008
746344.61 9008210.95 12.07
DAYS
2008-
2009
1754954.5 12514218.12 7.13
DAYS
148
ASFA
AVERAGE PAYMENT PERIOD
Years NO.OF
DAYS
CREDITORS
TURN OVER
RATIO
PERIOD
2006-
2007
360 5.18 69.49
TIMES
2007-
2008
360 12.07 29.83
TIMES
2008-
2009
360 7.13 50.49
TIMES
INTERPRETATION
IN COMPARISION TO 2005 PERFORMANCE
2006 CREDITORSTURNOVER RATIO HAS REMAINED CONSTANT AT 9 TIMES
WHICH REFLECTS THAT THE PATTERN OF PAYMENT TO THE SUPPLIERS IS
CONSTANT.
149
ASFA
Balance sheet
Comparative
statement
Absolute
change
%change
Particulars As at 31-3-
08
As at 31-3-
09

Liabilities:
Share capital 500000 500000 0 0
Reserves and surplus 9749738.44 10345501 595762.8 6.11
Profit and loss A/C 651221.04 632510.59 -18710.45 -2.87
General reserve 300989.25 300989.25 0 0
Provisions 10598407.95 11488694 890286 8.40
Dealer deposits 480000 490000 10000 2.08
Total liabilities: 22280356.68 23757695 1477338.35 6.63

Assets:
Fixed assets 6285822.74 6285822.74 0 0
Other fixed assets 9345368.47 9857275 511906.5 5.48
Investments 26000 26000 0 0
Current assets:
Total Inventories 5388230 7566755
Debtors 857967.39 608666.21
Cash and bank
balance
4219683.04 2777780
loans and advances 2157127.60 3515309.5
Total current assets: 12623008.03 14468510.71

Less current
liabilities:

Total current
liabilities:
5999842.56 6879913.23

Net assets: 6623165.47 7588597.5 965432.01 14.58

Total assets: 22280356.68 23757695 1477338.51 6.63
150
ASFA
Balance Sheet
Common Size Statement
08
As at 31-3-
09
As at 31-3-
08
As at 31-3-
09
Liabilities: (in %) ( in %)
Share capital 500000 500000 2.244 2.10
Reserves and surplus 9749738.44 10345501.24 43.76 43.55
Profit and loss A/C 651221.04 632510.59 2.92 2.66
General reserve 300989.25 300989.25 1.35 1.27
Provisions 10598407.95 11488693.95 47.57 48.36
Dealer deposits 480000 490000 2.15 2.06
Total liabilities: 22280356.68 23757695.03 100 100
Assets:
Fixed assets 6285822.74 6285822.74 28.21 26.46
Other fixed assets 9345368.47 9857274.97 41.94 41.49
Investments 26000 26000 0.12 0.11
Current assets:
Debtors 857967.39 608666.21
Cash and bank
balance
4219683.04 2777780
Less current
liabilities:
Total current
liabilities:
5999842.56 6879913.23
Net assets: 6623165.47 7588597.48 29.73 31.94
Total assets: 22280356.68 23757695.19 100 100
151
ASFA
Balance Sheet
Trend Analysis
08
As at 31-3-
09
As at 31-3-
08
As at 31-3-
09
Liabilities:
Share capital 500000 500000 100 100
Reserves and surplus 9749738.44 10345501.24 100 106.11
Profit and loss A/C 651221.04 632510.59 100 97.13
General reserve 300989.25 300989.25 100 100
Provisions 10598407.95 11488693.95 100 108.40
Dealer deposits 480000 490000 100 102.08
Total liabilities: 22280356.68 23757695.03 100 106.63
Assets:
Fixed assets 6285822.74 6285822.74 100 100
Other fixed assets 9345368.47 9857274.97 100 105.48
Investments 26000 26000 100 100
Current assets:
Debtors 857967.39 608666.21
Cash and bank
balance
4219683.04 2777780
Less current
liabilities:
Total current
liabilities:
5999842.56 6879913.23
Net assets: 6623165.47 7588597.48 100 114.58
Total assets: 22280356.68 23757695.19 100 106.63
152
ASFA
Income Statement
Trend
Analysis
Particulars 2008 2009 200
8
2009
Net sales (A) 20942402 23429173 100 111.87
Less: COGS (B)
Purchase 9008210.95 12514218
Add: Opening stock 4832812 5201921
Add: Manufacturing
expenses
2359113.39 2015550
Add: Wages 2109046.2 2562434
Less: Closing stock 5388230 7566755
12921053 14727368 100 113.98
Add: Other income 215393.9 568925 100 264.13
Gross profit (A+C)-B
8236743 9270729 100 112.55
Less: Operating
expenses
Salary 4329229.55 5054753
Administration expenses 1287194.83 1619563
Travelling expenses 86264.7 92099.27
Repairing expenses 593247.05 416338.1
Depreation 941592 890286
Other expenses 264289.04 675345.4
7501817 8748385 100 116.6169
Operating profit
734926.1 522344.4 100 71.07441
Less: Non operating
expenses
116077.4 175934.7 100 151.5668
618848.7 346409.7 100 55.97647
Add: Non operating
income
143215.4 51509.5 100 35.96646
Profit before tax 762064.1 397919.2 100 52.21597
Less: Tax 423132.2 115217 100 27.22955
Net profit
338931.9 282702.2 100 83.40972
153
ASFA
Income Statement
Common Size
Statement
Particulars 2008 2009 2008 (in
%)
2009 (in
%)
Net sales (A) 20942402 23429173 100% 100%
Less: COGS (B)
Purchase 9008211 12514218
Add: Manufacturing
expenses
2359113 2015550
Add: Wages 2109046 2562434
12921053 14727368 61.70 62.86
Add: Other income 215393.9 568925 1.03 2.43
Gross profit (A+C)-B 8236743 9270729 39.33 39.57
Less: Operating
expenses
Salary 4329230 5054753
Administration
expenses
1287195 1619563
Other expenses 264289 675345.4
7501817 8748385 35.82 37.34
Operating profit 734926.1 522344.4 3.51 2.23
Less: Non operating
expenses
116077.4 175934.7 0.55 0.75
618848.7 346409.7 2.96 1.48
Add: Non operating income 143215.4 51509.5 0.68 0.22
Profit before tax 762064.1 397919.2 3.64 1.70
Less: Tax 423132.2 115217 2.02 0.49
Net profit 338931.9 282702.2 1.62 1.21
154
ASFA
Income statement.
Particulars 2008 2009 Comparative
Statement
Absolute
change
%
change
Net sales (A) 20942401.96 23429172.86 2486770.9 11.87
Less: COGS (B)
Purchase 9008210.95 12514218.12
Add: Manufacturing
expenses
2359113.39 2015550.42
Add: Wages 2109046.2 2562433.9
12921052.54 14727368.44 1806315.9 13.98
Add: Other income 215393.85 568925.03 353531.18 164.13
Gross profit (A+C)-B 8236743.27 9270729.45 1033986.18 12.55
Less: Operating expenses
Salary 4329229.55 5054753.02
Administration
expenses
1287194.83 1619563.3
Other expenses 264289.04 675345.35
7501817.17 8748385.04 1246567.87 16.62
Operating profit 734926.1 522344.41 -212581.69 -28.93
Less: Non operating
expenses
116077.36 175934.72 59857.36 51.57
618848.74 346409.69 -272439.05 -44.02
Add: Non operating
income
143215.37 51509.5 -91705.87 -64.03
Profit before tax 762064.11 397919.19 -364144.92 -47.78
Less: Tax 423132.18 115217 -307915.18 -72.77
Net profit 338931.93 282702.19 -56229.74 -16.59
155
ASFA
HUMAN RESOURCE MANAGEMENT
156
ASFA
STRUCTURE OF HUMAN RESOURCE MANAGEMENT
157
ASFA
HUMAN RESOURCE PLANNING
i. Objectives
ii. Process
iii. Guidelines for effective hr planning
Objectives of human resource planning
They ensure optimum use of existing human resources.
They forecast future requirements for human resources.
They provide control measures to ensure that necessary human resources
are available as and when required.
They link human resource planning with organizational planning. They
assess the surplus and shortage of human resources. They anticipate the
impact of technology on jobs and human resources. They determine levels of
recruitment and training. They estimate the cost of human resources and
housing needs of employees. They provide a basis for management
development programmes. They facilitate productivity bargaining. They meet
the needs of expansion and diversification programmed.
158
ASFA
Process of human resource plannin
Human resource planning as been defining as, The process by which management
determines how an organization should move from its current manpower position to
its desirable manpower position. Though it management strive to have the right
159
ASFA
number and the right kind of people at the right place, at the right time, doings
things which result in both the organization and the individual receiving, maximum
long range profit.

In ASFA, human resource planning process is done by following steps:
1. Organizations objectives and policies
Human resource plan needs to be based on organizations objectives that means
objective of human resource must be derived from organizations objectives.
Specific requirement in terms of number and characteristics of employee should be
derived from these objectives.
ASFA take care of organization objectives and policies while recruit
employees. ASFA also take care of such questions like whether organization
should fill vacancies by internal promotion or hiring from out side, which type of
training and development program are needed, what policies are needed to handle
staff unit, how to understand employee job etc.
2. Human resource demand forecast
Human resource forecasting is the process of estimating the future quality and
quantity of people require. The basis of forecast is annual budget and long term
plans of ASFA, which are translated into activity level for each function and
department. Base on this information the number of hours to be worked by each
skilled man power in a given period of time should be calculated. Once the hours
are available the next logical step is to find out the quantity and quality of personnel.
The human resource forecasting is done by various techniques like managerial
judgment trend analysis, Delphi method, flow models and work study method and
many others. ASFA use managerial judgment technique for its human resource
forecasting because it is very simple technique. In this techniques ASFAs
managers are sit together, discuss and decide the future demand for labor.
160
ASFA
3. Human resource supply forecast
Personnel demand analysis provides the manager with number and quality of
employee that to be require. Next logical step for manager is to find out the number
of people likely to be available form within and outside of an organization. The
supply forecast covers:
i. Existing human resource
ii. Internal source of supply
iii. External source of supply.
Above supply covers points discuss are as follows:
1) existing human resource
Analyses of present employee or hr audit summaries of each
employees skill and ability.HR planner understanding of the capability
available in the organization workforce. the summary are included :
= Personal data (age, gender, marrid status etc.)
= Skills (education,experience,training etc.)
= special qualification and job history
= capacity and performance ratio of individual
2) internal source of supply
HR planner may focuses on available supply of manpower from within
the org. the technique generally view for the purpose,
= Inflow outflow from over rate.
= Condition of work.
= Productivity leval
= Movment amount joob.
3) external source of supply
in addition ti internal supply the org need ti look out for prospective
employee from external source.
161
ASFA
ASFA use the analysis of present employee human resource audit summaries,
each employee skill and ability for understanding capability available in
organizations work force. It also forecast the internal source or supply. Managers
are calculating the available supply of manpower within the organization. ASFA
also calculate how many employees are available in market or outside the
organization whose are take responsibilities of job.
2. Human resource programming
Once, an organizations personnel demand and supply are estimated or
forecasted by the managers, then they take care of the balancing between them.
The balancing is needed in order to fill the vacancies by the right employees at right
time. So human resource programming has greater important in planning process.
3. Human resource plan implementation
Implementation require converting human resource plan into action, such human
resource plan includes recruitment, selection, placement, training, development,
retraining and redevelopment, ASFA use various plans like retention plan, down
sizing plan and succession plan.
4. Control and evaluation prograam :
Control & evaluation represent the monetary of HR planning process hr plan
should include budget target and standards.we should also clarify responsibility for
implementatiom and control.it should establish reporting procedure to monitor the
excusition of HR plan again achieve result.
162
ASFA
Guidelines for effective human resource planning
1) Tailor-made:
Human resource plans should be balanced with the cooperative plans of the
enterprise. The methods and techniques used should fit the objectives, strategies
and environment of the particular organization.
2) Appropriate time horizon:
The period of a human resource plan should be appropriate to the needs and
circumstances of the specific enterprise. The size and structure of the enterprise as
well as the changing aspirations of the people should be taken into consideration.
3) Adequate organization:
Human resource planning function should be properly organized. A separate
dell, section or committee may be constituted within the human resource
department to provide adequate focus, and to coordinate the planning efforts at
various levels.
4) Top management support:
Before starting the human resource planning process, the support and
commitment of top management should be ensured. Moreover, the exercise should
be carried out within the limits of a budget. There is a use-formulating plan, which
cannot be implemented due to financial constraints.
5) Information system:
An adequate database should be developed for human resources to facilitate
human resource planning.
6) Balanced focus:
163
ASFA
The quantity and quality of human resources should be stressed in a
balanced manner. The emphasis should be on filling future vacancies with right
people rather than merely matching existing people with existing jobs. Upward
mobility of existing staff needs to be considered carefully. Labor turnover should be
considered according to length of service rather than merely on aggregate basis.
164
ASFA
RECRUITMENT
In simple term, recruitment is understood as the process of searching for and
obtaining application for jobs, from among whom the right people can be selected.
+ Recruitment
O Definition:
According to Flippo, Recruitment can be defined as the process of searching
for prospective employees and stimulating and encouraging them to apply for
jobs in an organization.
Factors Affecting Recruitment
They have consider two factor of recruitment they are explain below
165
ASFA
O External factors:
External sources far outnumber the internal methods. Specifically, sources external
to a pharmacy are:
Advertisement
This the most popular method of seeking recruits as many recruiters prefer
advertisements because of their wide reach. There are several
advertisements which the company is following. This are:
- Want ads: describes the job and the benefits, identify the employer,
and tell those who are interested and how to apply.
- Blind ads: one in which there is no identification of the organization.
Respondents are asked to reply to a post box number that to fill the
lower level positions.
166
ASFA
O Employment exchange
Employment exchanges have been setup all over the country in difference to
in provisions of the Employment Exchanges Act, 1959. The act requires the
entire industrial establishment to notify the vacancies before they are filled.
ASFA also notify its vacancies and take employees from employment
exchange.
O Campus recruitment
Colleges, universities and institutes are fertile ground for recruiters. ASFA
also recruit it employee from colleges and universities campuses. Employee
of pharmacy go to various B Pharm colleges and meets its principals and
teachers take information about students from them then meet those
students and give job offer to them.
O Internal factors:
ASFA uses internal source when they need more employees in short period
of time.
O Relative of present employees
It is important internal source of ASFA. ASFA use this source when it
requires argent employees for production at low cost. A major concern with
employee recommendation is that the referred individuals are likely to be
similar in type to those who are already working for the company.
O Promotion and transfer
This Pharmacy often uses promotion and transfer for vacant sits. This is a
good source of internal recruitment. Promotions to hire positions are
advantagable for pharmacy by various kinds. Another way to recruit from
167
ASFA
preset employee is transfer without promotion. Pharmacy uses it when other
branch has required skill and experienced employee.
O Former employee
Former employees are also an internal source of applicants. Some retired
employees may be willing to come back to work on part time bases or may
recommend someone would be interested in working for the pharmacy.
O Present Employees
Promotion and transfers from among the present employees can be a good
source of recruitment. Promotion to higher positions has several advantages.
Company is using this source of recruitment as the basic source for recruiting
the personnel because of the following advantages:
They are:
a) It is good for public relations
b) It builds morale
c) It encourages competent individuals who are ambitious
d) It improves the probability of a good selection, since information on
the individuals performance is readily available
e) It is cheaper than going outside to recruit
f) Those chosen internally are familiar with the organization
g) When carefully planned, promoting from within can also act as a
training device for developing middle level and top level managers.
168
ASFA
Moreover company can have a kind of trust on their present employees that
will help them to recruit the right kind of person at the right place for the
achievement of the job.
O Employee Referrals
This can be a good source of internal recruitment. Employees can develop
good prospects for their families and friends by acquainting them with the
advantages of a job with the company. The company is using this source of
recruitment by offering their employees the finders fees as a reward for
finding the right personnel. Company is paying 5,000 to 7,000 ruppes to each
employee for the successful finding. As the company is a co-operative
company and hence the company has a large pool of potential employee so
company is using this source very effectively.
O Former Employees
Former employees are also an internal source of applicants. Some retired
employees may be willing to come back to work on a part-time basis or may
recommend someone who would be interested in working for the company.
The company has several employees who were the former employee of the
company and are working with the company on the part-time basis and many
former employees are the official employees for recruiting the personnel.
O Previous Applicants
Those who have previously applied for jobs can be contacted by mail, and this a
quick and inexpensive way to fill an unexpected opening. Company is using this
source in case of not getting the right personnel for the right job. In such cases the
company is using this source.
169
ASFA
RECRUITMENT PROCESS OF ASFA
1 The recruitment process of ASFA pharmacy starts with personal planning of
General Manager. When there is an any sit become vacant or a new employee is or
are require, General Manager first plan how many employees are require and of
what qualification. General Manager decides which type of people is requiring
means which type of skills an employee have need for recruitment in pharmacy. For
example, quality laboratory technician require qualification B.Sc. (Micro) and DMLT.
Managers are requiring qualification of MBA. So the first step of recruitment process
of ASFA pharmacy is set a standard for recruitment.
1 The second step is searching for employees. General Manager decides from
where, the employees are recruit and by which source. The middle level of
employees and workers are mostly recruiting from city or areas which are near to
170
ASFA
pharmacy. In source for recruiting, General Manager uses both internal and external
source of recruitment. Manager use internal source such as:
Relatives of present employee
Promotion and transfer
Former employees
Internal source are use when more employees are required.
ASFA use external sources such as:
Advertisement in news paper
College campus recruitment
Employment exchange
1 The third step is screening of collected applications. Applications received in
response to advertisement are screened and only eligible applicants are called for
an interview. Here the recruitment process is ends and the selection process
begins.
171
ASFA
SELECTION
Selection is the process by which candidates for employment are divided into class-
those who will be offered employment and those who will not. Thus, the selection
process is a tool in the hand of the management to differentiate the qualified and
unqualified applicants by applying various techniques such as interviews, tests.
PROCESS OF SELECTION
Selection process starts when recruitment process ends. The steps of selection
process are as follows.
1. The first of selection process is receipt of applications. Applications are
screened then after and only those are selected whose are matched with
require specifications and attributes.
Heading Production Manager vacancy:1
Detail All work related to production
Education B.pharm, M.pharm
Experience At least 2 year in good pharmasutical
Sex Male
Date 12/12/2009 12:00:00 AM
2. The next step taken by pharmacy is preliminary interview. In this only general
questions are asked and some information about pharmacy and of job is
given to applicants.
172
ASFA
3. The third step is selection test. Pharmacy takes written selection test in which
they ask questions on ayurvedic medicines. This test is taken only for middle
level. Here they to select the candidate conduct test. Test helps to know the
attitude, behavior and performance. A test helps in getting better candidate
for the job.
Mathematical test.
English test.
Read and write test.
Mental test.
Skill test.
Job knowledge test.
Situation test.
Interest test.
4. For worker and top level test is not taken. They call for interview. Interview is
taken by managers and the applicants who are passed from this are selected
for job.
They conduct interview for 3 purposes:
Obtaining information about candidate.
Giving information to candidate about the company.
Establishing friendly relationship between the employer and the
candidate.
There are several type of interview is conducted by them:
Informal interview.
Non-directed interview.
Stress interview and board interview.
173
ASFA
5. Job is offered to selected applicants by giving appointment later and
information of pharmacy, job and his co-workers.
Documents related to recruitment and selection :
There are no documents releted to recruitment and selection as there is no
formal procedure carried out by the company as such.
JOB DESCRIPTION
Job description is a written statement of what the job holder does, how it is
done, under what condition it is done and why it is done. It describes what the job is
all about, throwing light on job content, environment and condition of employment. It
is descriptive in nature and defines the purpose and scope of job.
For example:
Job descriptions of ASFA pharmacy for top and middle level include
same information as follows.
Information about pharmacy
Job title
Designation of job holder
Job summary
Job duties and responsibilities
Working conditions
Relationship and behavior
174
ASFA
JOB SPECIFICATION
Job specification summaries the human characteristics needed for
satisfactory job completion. It tries to describe the key qualification someone needs
to perform the job successfully. It spells out important attributes of a person in terms
of education, experience, skills, knowledge and abilities to perform a particular job.
ASFAs job specification for production manager is including the following things:
+ Post graduation degree
+ 2-3 years experience
+ Age
+ Intelligence and power of decision making
+ Various skills
+ Behavior and personal attributes.
ASFAs job specification for middle level includes all above matters with some
change in education and skills.
For example designation required for the various post in ASFA:
Post Qualification
Production manager B.pharm,M.pharm,M.D. in ayurved
Assistant manager M.com,MBA
Supervisor B.pharm
Assistant Supervisor D.pharm
Clerical staff B.com,Diploma in computer
175
ASFA
PERFORMANCE APPRAISAL
Performance appraisal is the process of systematic, periodic and impartial,
estimating or judging the value, excellence, qualities or status and thereby
evaluating the performance or qualification of a person, things or object in terms of
requirement of the job for which he is employed.
ASFA have no performance appraisal system but ASFA can effectively
measure the performance of its workers. ASFA may use this appraised report for
promotion, transfer, statutory requirement, training and development and for
providing incentives.
ASFA can easily measure the performance of its workers on time base
method because in ASFA all worker has a card for attendance and work hours are
easily calculated from that card.
ASFA also the record the time of completion of job. There are many medicines
are prepared by ASFA at the same time. Medicine prepared in various
departments and the time of processing in each department is record by ASFA
and from that time it can measure performance of workers of every department.
+ Salient (most important) feature of P.A
Personal department after compliting personal data sheet will forward the
performance appraisal record forms to reviewing authority for their respective
areas who in turn will distribute them to the assessor of their area structur for
appraisal and review shall be as per following :
ASSESSES ASSESSOR REVIEWING AUTHORITY
Worker Supervisor Manager/HOD
Supervisor Manager HOD/G.M
Manager HOD G.M/Factory head
G.M Factory head Factory head
176
ASFA
PROMOTION
Promotion refers to upward movement of an employee form current job to
another which commands better prestige, higher responsibility and authority, higher
challenges, better working condition, hours of work and higher rank.
Promotion policy of ASFA pharmacy
Promotion policy of ASFA is clear in whether to fill up higher positions by
internal promotions the recruit people from outside.
ASFA give promotion on the basis of both seniority and merits so it can take
advantages of both.
It is clear about policy of promotion is whether to promote employees against
vacancies or non-vacancies.
ASFA establish a well define promotion chart showing who can go up to what
level in the pharmacy.
ASFA give promotion to any employee only one in a year.
The promotion policy is prepared by discussion with managers and other staff.
Promotion is not be forced on reluctant employees.
Guide lines for promotion:
They want to align your reward strategies with your business objectives to
create value for shareholders.
They want your reward strategies to better support the objectives of
recruitment, retention and motivation.
They want to confirm that your reward plans are tax efficient in all relevant
jurisdictions.
177
ASFA
They want to take inventory of your current reward programs across all
territories in order to evaluate potential for redesign.
They want to ensure your reward plan is competitive in the marketplace and
reasonable to shareholders and other stakeholders.
Objective of promotion
They possess 2 main purposes behind giving promotion to employee:
Main reason behind giving promotion is whenever there is vacancy in any
department of the bank.
When expansion of bank work take place.
Criteria-
In ASFA promotion is done on the basis of seniority .
178
ASFA
DEMOTION
Demotion implies the assignment of an employee to a job of lower rank with lower
pay. It refers to downward movement of an employee in the organizational hierarchy
with lower status and lower salary.
Demotion policy of ASFA
1 ASFA mostly dose not give demotion to any employee but it give demotion only
3 times in its life.
1 ASFA give demotion only when employee is not regular, do not work sincerely or
employees behavior in organization not good.
1 In above cases, sometime ASFA left the employee from Pharmacy.
1 The policy is fair and equal for all level of pharmacy.
1 The circumstances under which employees can be demoted is clearly specified
and made known to employees.
179
ASFA
WELFARE ACTIVITIES
Labour welfare means anything done for the comfort and improvement.
Intellectual or social of the employees over and above the wage paid which is not a
necessity of the industry.
Employee welfare or labour welfare means, The efforts to make life worth
living for workmen.
Intra mural welfare activity of ASFA
1 Convenience and comfort during the work
1 Workshop and cleanliness, lighting, elimination of dust, smoke, gases
1 Control of effluents
1 Supply of necessary beverage, pills and tables, tea, coffee
1 Notice boards, posters, information, slogans
1 Distribution of work hours and provision for rest hours, meal times and breaks
1 House keeping, garden, passage, lawns, floor maintenance
1 Medical facilities
1 Compensation for accidents
1 Safety instruments such as guards, caps, shoes, aid equipments
1 Uniform and changing rooms
1 Urinals and latrines, wash basins, waste disposal
1 Provision for drinking water
180
ASFA
1 Economic services such as health insurance and bonus schemes
Extra mural welfare activity of ASFA
1 Transportation
1 Vocational guidance and credit societies
1 Discount in purchase on medicines
1 Roads, lighting, garden
1 Communication facility
1 Security
1 Training and development programs
Welfare activity for society
1 Provide employment
1 Provide ayurvedic medicines at fair price
1 Effective waste disposal system
1 Effective use of resources of society
181
ASFA
EMPLOYMENT RECORD KEEPING
ASFA pharmacy maintained its record in the form of file. There are following
details, which are involved in the record keeping of each employee.
Employment history
Employee no
Name
Address
Rate of salary
Total balance saving
Attendance record and pay roll
Leaves, transfers and promotion
Shift cord
Over time cord
Training Records
Accident and sickness records
Employment rating
The objectives of employee records in ASFA are following:
1. To provide an evidence of what has taken place in the organization.
2. To supply information required for taking personnel decisions.
3. To provide a basis for the formulation, evaluation and modification of
personnel and program.
4. To meet statutory obligations under various labour laws.
182
ASFA
TRAINING AND DEVELOPMENT
Training is a learning process which seeks a relatively permanent change in
behavior that occurs as a result of experience. Training refers only to instruction in
technical and organized operations. Training courses are typically designed for a
short term, stated set purpose.
In ASFA pharmacy, training is given with the objective of increase in
productivity of employees, increase quality of work, enhance and update knowledge
and skills of employees and many others but there is no without training program in
ASFA. ASFA provides training as on job training and give training to new
employee. In pharmacy, training is given to the workers which are basically at
period of one month.
On job training is training is training in which pharmacy and its members are
help and provide guidance, if there is any difficulty in any work. Training is based on
learn and teach and hence, employees will grow with experience.
Development is the process of transition of an employee from a lower level of
ability, skills and knowledge to that of higher level. Pharmacy also run program of
development periodically. Pharmacy tries to develop new skills, techniques and
personality of their employees.

183
ASFA
INDUCTION TRAINING
Induction is the process of receiving and welcoming an employee when he
first joins a company and giving him the basic information which he needs to settle
down quickly and happily and start work. In the pharmacy, induction training is given
to all new joiners in ASFA. ASFA provide induction training with objective of
reduce insecurity, anxiety, exploitation etc. from the mind of new joiner and he/she
can work easily and with skills.
Contents of Induction Programme
ASFA have formal induction program. All details are providing by pharmacy to new
employee. ASFAs content of induction program includes the following matters:
+ History of ASFA
+ Objectives of pharmacy
+ Name and designation of managers
+ Employees designation and responsibility
+ Layout of pharmacy
+ Production and other processes of pharmacy
+ Job duties, location, tasks, objectives etc
+ Safety steps
+ Employee benefits such as pays, holidays, welfare activities
+ Introduction to superiors, coworkers and other staff
Induction involves 2 sub. processes: -
184
ASFA
Acquainting the new employee with his surroundings
Indoctrining him in the philosophy of the enterprise
Needs For Training
Getting the best from people at every level when there is constant change is
the key to sustainable competitive advantage. Solid strategies, processes and
technology alone do not deliver results. It takes people to accept, adopt, drive, and
sustain the change to realize tangible impact with the help of training due to which
the need of training in the bank arises. Success in bank hinges on strategic agility
and the ability to execute.
We can help if:
O They want to structure bank with the right capabilities and leadership to
execute the business strategy.
O They want managers to understand, manage and own people issues.
O They need to get the right people with the right skills in the right roles at
the right time
O They want to ensure successful change by involving the people impacted
and enabling them to drive and sustain the business change
O They want the banks culture to be a competitive advantage
O They are seeking benchmarks for the efficiency and effectiveness of HR
O They have to establish the control and coordination required to manage
projects and programs successfully, achieving the right business results
O They need to engage and motivate a diverse workforce to focus on the
right things and strive for excellence
185
ASFA
LABOUR RELATIONS & TRADE UNIONS
Numbers of terms are used to denote word Labour Relation, such as
employee-employee relation, industrial relation, labour management relation, etc.
According to Dale Yodder :The industrial relation has been describe as a
relationship between management and employees or among employees and this
organizations bad characterize and grow out of employment.
Objective of industrial relationship in ASFA
1 Develop a sense of co-operation
1 Develop commitment and sense of belongingness.
1 To protect and safe guard the interest of labour as well as management
1 To promote and maintain industrial peace and harmony
1 To ensure and establish industrial democracy
1 To increase production as well as productivity
1 To improve living standard of workers by pay of fair wages, benefits and provision
of better living and work condition
186
ASFA
Trade union
Trade union or labour union is a continuing a long term association of employees
form to protect promote and improve, through collective action the social, economic
and political interest of workers.
Note: There is no trade union in ASFA pharmacy from 2007-2008. But the
employees can get many benefits if they make the union in pharmacy such increase
in salary, protect themselves form exploitation, freeze benefits, etc.
Different trade union activities of this org. are given as follows:
= Productivity orientation program.
= Employee development program.
= Leadership development program.
= Communication for better union mgt. relationship.
= Workers participation in mgt.
= Quality of worker life and productivity.
= Role of worker and trade union in competitive environment.
187
ASFA
WAGES AND SALARY ADMINISTRATION
Wages and salary administration means establishment and implementation
of sound policies and practices of employees compensation so that employees are
attracted, maintained and public relation image is built up. It includes job evaluation,
surveys of wages and salaries, development and maintenance of wage structure,
wage payment incentives, wage changes, adjustments etc.
ASFA gives wages and salaries according to time base wage system.
ASFA gives salaries at 7
th
of every month. ASFA use time base system because
it is old pharmacy and in that time peace rate wage system is not famous in
industry. ASFA also use this method because of some advantages like easy to
understand and calculate, earning of workers are regular and fixed ASFA want to
maintain quality which is not maintaining peace rate etc.
In ASFA, while deciding the structure of wage and salary administration,
ASFA first set objective of it which are as follows:
= To give fair and regular wages to employee
= To improve productivity by motivation
= Control costs through sound wage and salary administration
= To improve public image of company
= To attract others for employment.
METHODS OF WAGE PAYMENT
Basically there are two methods of paying labour remuneration and other
methods are combinations or modifications of these two. One is the time wage
system and another is the piece wage system.
188
ASFA
(a) Time Wage System:
Under this system, wages are paid on the basis of time spent on the
job irrespective of the amount of work done. The unit of time may be a day, a
week, a fortnight or a month. In the past, daily wages have been the most
common basis and, therefore, it came to be known as the Day Wage
System.
(b) Piece Wage System:
Under this system, remuneration is based on the amount of work done
or output for a worker. One unit of output is considered as one piece and a
specific rate of wage is paid per piece. Greater is the number of pieces
produced by a worker higher is his remuneration.
189
ASFA
190
ASFA
INCENTIVE AND MOTIVATION SYSTEM
Wage incentives are extra financial motivation. They are designed to
stimulate human effort by rewarding the person, over and above the time rated
remuneration, for improvements in the present or targeted results.
ASFA pharmacy uses certain incentive to motive its employees. Motivation
means to force a person and involve him to complete the works in right time and
place with help by providing a basic need or special need to worker. Especially
Maslows need hierarchy used to motive employees much as basic need, special
need safety need, recognize, identify, self-realization.
Extra salaries one such type of incentive, which is given to those employees
who show sincerity and regularity throughout in their work. Salary is the main factor
to motivate employees. Safety need is also used to complete the work.
ASFA gives incentive base on looking different factors of employees such
as, personality, nature, communication style, behavior, attitude etc.
For workers who are working at factories and branches are motivated in many
ways. They are given many incentives.
# Bonus :
All the workers working at company and its branchies given bonus
periodically.
# Extra work remunaration:
When there is more work load,extra work, workers are paid more as
compensation.
# Loans and advances:
When workers needs money for any expense,company gives them loans at
very nominal condition.
191
ASFA
# Sick leave : Sick leave is permitted to the employee when he is not able to do
the work due to illness.
Benefit of incentive plans:
Wage incentive schemes are considered beneficial to both employers and
employees in the following ways:
(a) Before introducing an incentive plan, scientific work study is carried out. It
helps to make improvements in work flow, work methods and man machine
relationship.
(b) Wage incentive plans provide an opportunity for hardworking and ambitious
workers to earn more.
(c) Employees are encouraged to become innovative. They think and involve more
efficient ways of doing work. Moreover, they bring to the notice of management
wasteful practices and problems that related productivity.
(d) Incentive plans help to improve discipline and industrial relations. These plans
are useful in minimizing absenteeism, accidents, and go slow.
(e) The costs of supervision are reduced as workers themselves are motivated to
work hard and improve performance so as to earn monetary rewards.
(f) A spirit of mutual cooperation and team work is created among workers. As
their activities are interdependent, any obstruction on the part of a worker can
affect output and rewards.
(g) Wage incentives are a sound technique of improving productivity. Workers are
likely to work at their best when they are offered monetary rewards for good
performance.
192
ASFA
HUMAN RESOURCE AUDIT
& INFORMATION SYSTEM
HR function in an organization is as important as the physical and mental
well being of a human body. Typically the basic reason why organizations prefer to
conduct an HR audit is to get a clear judgment about the overall status of the
organization and also to find out whether certain systems put in place are yielding
any results. HR audit also helps to figure out any gaps or lapses and the reason for
the same. Since every company plans certain systems and targets, an HR audit
compares the plans to actual implementation.
Organization undertakes HR audits for many reasons:
1 To ensure effective utilization of human resources.
2 To review compliance with tons of laws and regulations.
3 To instill a sense of confidence in the human resource department that it is well-
managed and prepared to meet potential challenges and opportunities.
4 To maintain or enhance the organization's reputation in a community.
193
ASFA
Benefits of HR Audit:
= It provides the various benefits to the organization. These are:
= It helps to find out the proper contribution of the HR department towards the
organization.
= Development of the professional image of the HR department of the
organization.
= Reduce the HR cost.
= Motivation of the HR personnel.
= Find out the problems and solve them smoothly.
= Provides timely legal requirement.
= Sound Performance Appraisal Systems.
= Systematic job analysis.
= Smooth adoption of the changing mindset.
194
ASFA
Suggestion for the company
By considering all the branch together the overall function of the company is
quite systematic and structerd.there is no need to major change in present system.
Though it is a co-oprative company there is very well human resource management
through hr planning, recruitment, selection & training.
Still one suggestion for the company is they should have more proper and
manage coordination system for human resource in order to understand all HR
function clearly without any ambigutie and all the work completed in time.
ASFA co-oprative has business on very large scale with so many branches. But
the way they have managed their human resource doing best possible utilization of
it is really admirable.
195
ASFA
CONCLUSION
The ASFA Pharmacy completed 60 years. During these periods Pharmacy
achieve many progressive stages. This Pharmacy has a head office and other five
branches. At this way its branches are spreading in different area of all Gujarat
state.
From the study of last 3 years Pharmacys financial report, we can say that
rate of progress of Pharmacy is very good. ASFA is co-operative pharmacy and
since its establishment it is never done loss but ASFA sale its medicines at low
price so that its profit is less compare to other Pharmacies. Pharmacys Sales and
Profit is decrease in current year to compare past years.
For the duration of our training in ASFA, we found that the workers and
managerial staff are good and the management of all departments is efficient.
Workers are fully satisfied with their work. This Pharmacys aim is not only do profit
but also work for employee welfare and societal welfare.
196
ASFA
Bibliography:
# www.ayur.com/about html
# www.holisticonline.com/ayurveda/ayv-introduction.htm
# www.indianmedicine.nic.in/html/ayurveda/ayurveda.htm#de
# www.wikipedia.org/wiki/ayurveda
Marketing management by Philip Kotler
Production management by K Aswathappa
Management accounting by R.S.N. Pillai Bhagvati
&
Financial management by I M Pandey
Human Resource And Personnel Management by K
Aswathappa
Drugs and Cosmetic Act, 1940 by Vijay Malik
197
ASFA

Asfa Final Project

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Asfa Final Project

Uploaded by

Copyright:

Available Formats

1

You might also like