REPORT on BATA PAKISTAN LIMITED

ORGANIZATION AND BATA PAKISTAN LIMITED

BATA SHOE ORGANIZATION

The company that evolved into Bata shoe organization was first registered in the town of Zlin Czechoslovakia on August 24, 1894. It was innovative from the beginning in that its founders intended the company to be a “shoe manufacturer”. This represented a significant departure from the centuries old tradition of the one-man workshop eking out a bare subsistence for his family on a Cobbler’s bench at home.

By 1905 Bata had grown too some 250-company employees. At 2200 pairs per day, the personal effectiveness of each Bata employee far outdistanced the few pairs per day produced by the their predecessors.

The young company overcome many early difficulties .I n order to meet growing demand during the early years, new production machinery was found in other countries and innovative show making technique were devised by skillful and resourceful Bata employees. New kinds of shoes were introduced using new way to promote them. Bata’s reputation as the innovative industry leader has been, maintained ever since. Despite the outbreak of the first world wart material shortages, manpower shortages, corbels and other challenges, sales increased to about two million pairs by 1917.

The post war economy presented a difficult environment for Bata. Currency was devalued and consumer purchasing power was at an all time low. Tomas conceived a plan to adjust to post war economic difficulties by maintaining the focus on the customer and reducing the price of shoe significantly. A tight focus on the customer had again process itself as a sound strategy. Tomas Bata thinking inn terms of expansion into new markets even as a teenager, travelling to Vienna to sell his shoe to the city’s merchants. While still a young company, Bata exported shoes to the USA, Europe and North Africa.

By 1918 the likelihood of the company’s 6,000 employees could only be guaranteed by aggressive marketing and future foreign expansion .In the early 1920’s Bata established new companies in Poland, Yugoslavia, Holland, Denmark, the united kingdom and the USA. In the early 1930’s Bata and Czechoslovakia were the leading footwear exports in the entire world. Bata also create companies while provided the communities with rail services, building construction, Insurance, publishing and new tannery.

To all Bata companies was applied the Bata system one of its most impotent and innovative elements was the arrangements of autonomous workshop through which all employees were provided with the opportunity to contribute ideas and to know in exact figures how this personal day to day achievements would directly affect profitability of their departments. Remuneration was with complete control of their own economic destinies.

New companies were also established in Egypt, Belgium, Finland, Luxembourg, Hungary, Italy, Indonesia, Singapore and India before Tomas Bata died prematurely in an airplane crash in 1937.

Following the death of the founder Tomas Bata, international expansion was over seen by Mr. J. A. Bata with D. Cipera Bata convened the first congress of the international of young men .He had already worked in several leadership positions with distinction and would soon spearhead the establishment of our Canadian company.

This company was expected to become the new international home base of the beginning of World War II when it seemed likely the organization would lose Zlin .by the Bata employed 42,000 people and produced more than 100,000 pairs per year. Following the war, a temporary worlds headquarters was established in the UK to help rebuild the seriously depleted organization .In the early sixties the Bata international center was built in Toronto , Canada deliberately designed to present the building from being expanded . It thus maintained an efficient, been head office consistent with the policy of worldwide decentralization.

Following world war II . Bata companies in Zlin and in many other countries were nationalize by the communist governments. This create event more challenges for the reconstruction team .At first some of our companies were slow to react to the dramatic style shifts desired in most markets following the war, but then Bata invented the ladies pump during the fifties, which became so popular that it was even incorporated into the company logo in some countries. This reinforced the importance of the company’s long time commitment to individual innovation and achievement.

During the 70’s, 80’s, 90’s the world-manufacturing base for footwear has shifted to developing countries, to the Pacific Rim and especially to China. Mr. T .G. Bata totally utilizes the company’s mission statement as a guideline for Bata Company operation .To be successful as a dynamic flexible and market responsive worldwide organization with footwear as its core business.

He has also identified a success recipe which includes emphasis on international product brands such as power, bubble garments Bata industrial a variety of retail store concepts such as ATHLETES WORLD, BATA CITY STORE, SHOE WORLD; advanced retail technique including coordinated product groups non foot-wear products and participative retailing integration of retail know how3 and manufacturing capability; and world wide implantation of state of the art production technologies.

Now the Bata shoe organization is the largest manufacture and under of footwear operations span the globe through 75 companies in 60 countries which together buy, sell and produce shoes in almost every country on earth. These include shoe factories, tanneries, engineering plants, producing shoe machinery and moulds, product development studies, quality control laboratories, hosiery factories and 6300 retail stores and 100,000 franchises more then 60,000 people are employed, producing and selling approximately 270 million pairs of shoes each year. Primarily for internal markets .An additional 40,000 people and their families depend on hobs in support services created by Bata operations .Now all these affairs are controlled by the foundries grandson.

BATA PAKISTAN LIMITED

Batapur came into being in 1942 at distance on 18 km. from Lahore with due entrepreneurial dynamism it expanded and grew by leaps and bounds presently claiming to be the largest shoe manufacturing unit in Pakistan .

Bata Pakistan comprises three divisions:

PRODUCTION, MARKETING AND ADMINISTRATION:

It annually produces more than 12 million pairs of leather, rubber, canvas and PVC Plastic footwear of high quality.

Batapur has its own tannery where leather of high quality is produced and is being consumed ion the manufacture of footwear of all kinds of cater to various marketing segments and exports .In accordance with the expansion program a new modern unit at maraka , Multan road Lahore was established in 1984 which produces highly sophisticated leather shoes on the most modern machines .likewise the company ,being leader in the market ,has future plans of further expansion besides updating existing auxiliary operations like quality control laboratory ,product development department and engineering workshops, etc.

DESCRIPTION OF VARIOUS DEPARTMENTS

There are many departments in BPL which are described under below :

1. Personal department

2. Finance department

3. Purchasing department

i) Local Purchase

ii) Imports

4. Marketing department

5. Other department

6. Tannery

7. Production department

i) Leather factory

ii) Plastic factory

iii) Rubber factory

8. Designing department

9. Laboratory

10. Merchandizing department

i) Seasonal planning

ii) 8 week forecast

iii) 4 week forecast

iv) 1 week forecast

11. Costing department

12. Training department

13. Distribution department

PERSONNEL DEPARTMENT

The organization’s effectiveness depends not only on how it is structured but also on how well its personnel are selected, trained, directed motivated and evaluated. The personnel department of Bata shoe organization well aware of its responsibilities selects the qualified, experienced, hardworking, semiskilled and unskilled persons after observing them from different angles. Once the person selected he or she is motivated through several incentives .The department already has a tradition to offer on the job training to the personnel .A semi skilled or unskilled person while in learning process enjoys all the benefits offered by the company to all the skilled employees. Employees are encouraged developed and trained to become more capable and competent in their jobs so that they can confront to the forthcoming challenges and problems .Several lectures ,development programs ,and seminars are arranged for the employees in this respect. Thereafter employees performances are also evaluated .The department future organizes different courses throughout the year to train and develop the personal. Moreover the company sends many of its personnel to attend local courses organized by the local institutes .it also sends every year some of its personnel to attend out side courses organized by the Bata limited ,Toronto and Bata shoe companies all over the world.

The company invites its employees to send their suggestions regarding improvements in work methods, saving on materials, improvements in production and sales departments. Bata Pakistan limited publishes a forthrightly bulletin to inform the employees about events took place, development, sales as well as some other items of interest. Some social; happenings and educational instructions about discipline, rules and regulations, housekeeping and welfare are broadcast every week for the employees.

For motivational purpose sometimes personnel department assigns a challenging project to a person. Similarly some sort of other incentives and goals are given to the personnel for the purpose of motivation and performance evaluation . All these training ,developments and motivational practices ultimately contribute to the overall progress of the company.

FINANCE DEPARTMENT
Finance , another crucial department of Bata Pakistan Limited, deals with the financial aspects of the company. That department every year prepares aggregate budget of the company and that budget is further broken-down into several sub-budgets. As far as sub-budgets are concerned each department of company is given the target of annual budget and if any department wants deviate from the finance department to do so .The finance department keeps records of receipts payments, income and expenses of the company .That deals with the wages and salaries of the employees .It also has a responsibility to handle the assets and liabilities released issues .Furthermore ,it plays a vital role in the preparation of income Statements ,Balance Sheet and Tax documents.

PURCHASING DEPARTMENT

Purchasing department headed by Purchases Manager, deals with the purchases of raw material (excluding hides and skins) that is ultimately used to manufacture different stores of products. Actually that department not only maintains records of material essential to produce the products but also considers the average weekly consumption of one particular material in factory so that production process may not be hampered due to non-availability of material. That also places orders for instantly needed materials and keeps record of goods on way. Purchasing department acquires raw material through two channels.

i) Local Purchases

ii) Imports

LOCAL PURCHASES:

The company mostly acquires raw material form different business people dwelling in Pakistan. The company through local purchases on the one side, encourages the local business people on the other side, endeavors to safe valuable foreign exchange. Generally, its local purchases are Buckles, Straps, lashes and chemicals that are used in production of leather, rubber, P.V.C. BSO while working for the progress of the country, sometimes suffers due to preference given to the local purchases because the local businessmen don’t possess the quality that can easily be assessed from imports. Instead of having knowledge of all these aspects still the company prefers to buy from local business community.

IMPORTS:

AS MENTIONED EARLIER THE COMPANY MAKES ALL OUT EFFORTS TO GET RAW MATERIAL WITHIN PAKISTAN, THEN NO OTHER OPTION LEFT EXCEPT THE IMPORT OF THAT REQUIRED MATERIAL FROM OTHER COUNTRIES. THE IMPORTS ARE DONE THROUGH LETTER OF CREDIT WHICH IS THE SAFEST WAY OF DOING INTERNATIONAL BUSINESS. NEVERTHELESS, BEFORE PLACING AN ORDER OF IMPORT, PURCHASING DEPARTMENT MAKES COMPARISON LIST OF PRICES, ADVANTAGES AND DISADVANTAGES ASSOCIATED WITH THE PROSPECTIVE PURCHASES OF MATERIAL FROM ONE BUSINESSMAN TO ANOTHER BUSINESSMAN. FINALLY BUSINESS WHOSE RATES ARE APPROPRIATE AND YIELDING MORE ADVANTAGES IS GIVEN ORDER TO SHIP THAT SPECIFIC MERCHANDISE IN STIPULATED TIME.

Marketing

Marketing programmes that identify and satisfy customers needs have always been a top priority in the B.S.O. As a result, entirely new types of selling systems have been created and standards developed that have influenced the shoe business world wide. These have resulted in marketing polices and guidelines being laid down to assist the companies in training personnel and introducing modern marketing techniques. They have helped to establish one of the most effect retail distribution systems in international trade, which although standardized, retains enough flexibility to encourage cultural diversity. Guidelines have been written covering a wide range of subjects, including store locations and lay out, design standards, merchandising, inventory control and staff training. which has led to cooperation between the companies and, at the same time, stimulated and encouraged trade between regions and countries. Product development and the introduction of brands is another aspect of marketing. Because of the importance placed on marketing, standards and programmes are constantly being improved and updated through seminars and conferences.

The most important meeting of the year takes place each spring in Europe, when more than 200 participants from product development, marketing, retailing and personnel attend Shoehorn of one week. If there is a single forum, a point at which the Bata year is focused, it is the world meeting at Shoehorn.

Shoehorn was originally a shoe conference to which each company brought its best shoes: from these were selected the shoe lines the organization would sell in coming seasons. Judging the shoes provided a natural, competitive stimulus for the companies, and, as a result, the quality and range of shoes steadily improved year after year.

As Shoehorn matured, it remained essentially a shoe conference, but gradually expanded to included satellite conferences in marketing and retailing. Exhibition areas were expanded to enable the companies to display their most creative work to each other. As store standardization grew in importance, fully staffed, operating stores were built to show the latest features in design and selling methods. And outside experts in a wide range of business areas were brought in to leaven the mix.

The evolution of Shoehorn coincided with fundamental changes in world markets. Fashions and tastes were becoming more universal: styles in Europe were on the streets of Bangkok or Sao Paulo within weeks sometimes sooner and customers were responding to the same marketing stimuli.

In the lat4e “Seventies, a complete marketing and advertising programme was developed under the slogan “Bata understands Shoes”, and offered to all the companies. The success of the programem which ran in newspapers all over the world at the same time, was instantaneous, and today the symbol, an open fan of shoes, is common everywhere in the world.

OTHER MATERIAL ACQUISTION

Bata shoe organization acquires raw material (skins and hides) from different parts of the country. These purchased skins and hides are transferred to warehouse where application of several chemicals avoid the risk of erosion and enhances the storage life. Whenever demand arises these skins and hides are transferred from warehouse to tannery.

TANNERY

In tennery skins and hides undergo the follwing processes.

i) Soaking

ii) Liming

iii) Deliming

iv) Splitting

v) Drying

vi) Dying

SOAKING:

That is a process where water and chemicals are applied and original position (when these were flay of from the animals) of these skins and hides is tried to brought lack.

LIMING:

In this process several chemical are injected in hides whiz become

slightly. These limed and moisturized hides can be kept in stores for a long time. These chemicals injected hides are also called wet blue leather.

DELIMING:

That process is contrast to the liming process where injected chemicals in liming process are dejected from hides so that these can be utilized for shoe manufacturing purpose.

SPLITTING:

In this process skins and hides under-go splitting to reduce corpulence or thickness.

DRYING:

Here drying up process of skins or hides is done. Mostly two or three methods are used to dry up the skins and hides.

DYING:

The needed pigment or color is given to the skins and hides in this process. Generally black, dark brown and light brown colors are given to the skins and hides. The dying up process ends up with the finished from of leather.

Finished leather is transferred to leather store wherefrom it is forwarded to leather factory according to the requirement of this unit.

PRODUCTION DEPARTMENT

LEATHER FACTORY

Leather factory consists of several departments, is a crucial mechanized unit of Bata shoe organization where different components of the shoe are prepared and combinations of these components ultimately produce the shoes. Although leather shoes are produced in leather factory yet two types of sales are used in manufacturing leather shoes.

i) Rubber sole

ii) Leather sole

If the rubber sole is required to produce a leather shoe that sole is acquired from rubber factory. On the other side if leather sole is required it is entirely produced in leather factory. The latter case happens rarely because most of the time rubber sole is used in leather shoes.

The entire leather factory has been divided into several departments to prepare different components of leather shoes. In one department different components of leather shoes. In one department different pieces are taken from leather sheet and in another department these pieces are tailored on the sewing machines. Another department places buckles straps etc. Another department is bewitched in finishing and removing toothed edges. In prices these sorts of process are done in leather factory and ultimately these diversified components are collected together which makes the upper side of shoe attached buckles, straps, ties etc. The point of notice is that whole process in done quite and sewing are skillful and well of experienced, similarly minor faults are not skipped. The process of upper attaching with the sole begins right from here. Both the components (upper and sole) are placed on the conveyor and the labors are busy to glue the take both the components and attach these components to each other on the pressure machine, consequently, shoe take its ultimate fabrication.

Although the whole shoe making process ends up here yet shoes are not supplied to packing department rather these are sent for quality control checking. After checking and scrutinizing laboratory approves to transfer these shoes to packing department wherefrom these shoes are forwarded to distribution department.

RUBBER FACTORY

Rubber factory’s process are same as that are in leather factory the only differences are (i) In the rubber factory rubber shoes are manufactured whereas in the leather factory leather shoes are manufactured (ii) In the leather factory lasts of wood or iron metal are used whereas a aluminum lasts are used in the rubber factory. The daily production of rubber factory in about 31,000 pairs of shoes.

DESIGNING DEPARTMENT

Bata Shoe Organization always keeps eyes on the changing circumstances, fashions, trends as well as preferences of the customers. However as changes take place in market. Bata is also required to cope with metamorphosis in market conditions with the changes in product line and changes in designs of the products. Therefore Bata Pakistan limited has poised designing department where the processionals re utilizing their inherent talent.

The professionals are also sent abroad for training every year to attend designing and other international seminars. This gives the first hand opportunity to survey new trends in the word market and to distill the best of these in their own designing for the customers.

LABORARY

Bata Shoe Organization has its own laboratory where professionals busy to examine the quality of materials and ultimate products. Each new brand first checked in the laboratory and after the confirmation the production is start. The laboratory also conducts systematic research med at improving manufacturing process at Batapur.

MERCHANDISING DEPARTMENT

Merchandising department occupies the back bone place in the entire production of Bata Shoe Organization. That department shoes whole planning for production.

i) Seasonal Planning

ii) 8 Weeks Forecast

iii) 4 Weeks Forecast

iv) 1 Week Freeze

SEASONAL PLANNING:

This sort of planning is done two times in one fiscal year, Besides, factory management the store management also participates and determines what would be produced coming season.

8 WEEK FORECAST:

Eight weeks before the start of production management again get together if management anticipates any amendment is required they do it. Here production related issued are profoundly analyzed and discussed.

4 WEEK FORECAST:

Again 4 weeks before the start of production the raw material production facilities, production related issues and difficulties are seen and discussed. Furthermore, it is tried to pave the way for smoothes production.

1 WEEK FREEZE:

That is the last stage of planning where all the production related issues are finalized and production orders are issued one week before actual production. Thereafter no changing in production is possible.

Merchandising Department considering demands and order from different stores gives green signal to distribution department to fulfill the orders.

COSTING DEPARTMENT

MAIN OBJECTS OF COSTING:

1. To provide a forecast of the estimated result on:-

a) Any particular shoes

b) the total factory half year production plan.

2. To provide a measure of control over all sections of business by comparing actual results with estimated result and taking corrective action where necessary, using the latter as measure of efficiency.

3. To reduce costs, while maintaining or improving quality. The basis of all our costing is the seasonal production and sales estimates, which tells us the production, deputies and price and profit, adrift, article-wise.

The retail sale price of our shoe comprises component for:-

a) Material

b) Wages

c) Expenses or (O/Heads). Gross Margin.

The total of these makes the retails sale price.