1.

INTRODUCTION
Inventory management is the integrated functioning of an organization dealing with supply of
materials and allied activities in order to achieve the maximum co-ordination and optimum
expenditure on materials. Inventory control is the most important function of inventory
management and it forms the nerve center in any inventory management organization. An
Inventory Management System is an essential element in an organization. It is comprised of a
series of processes, which provide an assessment of the organization’s inventory.

“Inventory” means physical stock of goods, which is kept in hands for smooth and efficient
running of future affairs of an organization at the minimum cost of funds blocked in inventories.
The fundamental reason for carrying inventory is that it is physically impossible and
economically impractical for each stock item to arrive exactly where it is needed, exactly when it
is needed.

Inventory control is vitally important to almost every type of business, whether product or
service oriented. Inventory control touches almost every facets if operations. A proper balance
must be struck to maintain proper inventory with the minimum financial impact on the customer.
Inventory control is the activities that maintain stock keeping items at desired levels. In
manufacturing since the focus is on physical product, inventory control focus on material
control.

There are three basic types of inventory: raw materials, work-in-progress and finished goods.
Raw materials are the items purchased by firms for use in production of finished product. Work-
in-progress consists of all items currently in the process of production. These are actually partly
manufactured products. Finished goods are goods that have completed the manufacturing process
but have not yet been sold or distributed to the end user.

Inventory constitutes one of the important items of current assets, which permits smooth
operation of production and sale process of a firm. Inventory management is that aspect of
current assets management, which is concerned with maintaining optimum investment in
inventory and applying effective control system so as to minimize the total inventory cost.

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1.1 MEANING OF INVENTORY

Inventory generally refers to the materials in stock. It is also called the idle resource of a
company. Inventories represent those items which are either stocked for sale or they are in the
process of manufacturing or they are in the form of materials which are yet to be utilized. It also
refers to the stockpile of the products a firm would sell in future in the normal course of business
operations and the components that make up the product. Inventory is a detailed list of those
movable items which are necessary to manufacture a product and to maintain the equipment and
machinery in good working order.

1.2 OBJECTIVES OF INVENTORY MANAGEMENT

 To determine and maintain optimum level of inventory.

 To maintain a minimum investment in inventories to maximize profitability.
 To avoid excessive and inadequate level of inventories and to maintain sufficient
inventory for the smooth production and sales operation.
 To ensure a continuous supply of raw materials to facilitate uninterrupted production.
 To maintain sufficient stock of raw materials in period of short supply.
1.3 TYPES OF INVENTORIES

A manufacturing firm generally carries the following types of inventories:

 Raw Materials.
 Bought out parts.
 Work-in-process inventory (WIP).
 Finished goods inventories.
 Maintenance, repair and operating stores.
 Tools inventory.
 Miscellaneous inventory.
 Goods in transit.
 Goods for resale.
 Scrap Material.

1.4 REASONS FOR HOLDING INVENTORY

 To stabilize production.
 To take advantage of price discounts.
 To meet the demand during the replenishment period.
 To prevent loss of orders.
 To keep pace with changing market conditions.

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1.5 MOTIVES OF HOLDING INVENTORIES

 The Transaction Motive which facilitates continuous production and timely execution of
sales orders.
 The Precautionary Motive which necessities the holding of inventories for meeting the
unpredictable changes in demand and supplies of materials.
 The Speculative Motive which induces to keep inventories for taking advantage of price
fluctuations, saving in re-ordering costs and quantity discounts etc.,.

1.6 COSTS ASSOCIATED WITH INVENTORY

 Production cost.
 Capital cost.
 Ordering cost.
 Carrying cost.
 Shortage cost.

1.7 INVENTORY CONTROL

The main objective of inventory control is to achieve maximum efficiency in production

& sales with minimum investment in inventory. Inventory control is a planned approach of
determining what to order, when to order and how much to order and how much to stock, so that
costs associated with buying and storing are optimal without interrupting production and sales.

1.8 TYPES OF INVENTORIES

Inventories play a major role in a business or depending on nature of the businesses. The
inventories may be classified as under.

1 Raw Materials

Materials and components scheduled for use in making a product. These are the basic inputs,
which are converted into finished products through manufacturing process. Raw material
inventories are those units, which have been purchased and stored for future production.

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2 Work in process / Progress

Materials and components that have begun their transformation to finished goods. Materials
issued to the stop floor, which have not yet become finished products they are value added
materials to the extent of labor cost incurred.

3 Finished Goods

A finished goods is a completed part that is ready for a customer order. These goods have
been inspected and have passed final inspection requirements so that they can be transferred out
of work-in-process and into finished goods inventory. From this point, finished goods can be sold
directly to their final user, sold to retailers, sold to wholesalers, sent to distribution centers, or
held in anticipation of a customer order.

STORES & SPARES

The level of four kind of inventory depends upon the nature of the business. Supplies
include office and cleaning materials like soap, brooms, oil, light, blubs etc. these materials do
not directly enter production, but are necessary for production process.

1.9 BENEFITS OF INVENTORY CONTROL

The benefits of inventory control are:

 Improvement in customers’ relationship because of the timely delivery of goods and

services.
 Smooth and uninterrupted production and hence, no stock out.
 Efficient utilization of working capital.
 Economy in purchasing.
 Eliminating the possibility of duplicate ordering.

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1.10 PRINCIPLES OF INVENTORY CONTROL

 Inventory is only created by spending money for materials and the labour and overhead to
process the materials.
 Inventory is reduced through sales and scrapping.
 Accurate sales & production schedule forecasts are essential for efficient purchasing,
handing & investment in inventory.
 Management policies which are designed to effectively balance size and variety of
inventory with cost of carrying that inventory are the greatest factor in determining
inventory investment.
 Forecasts help determine when to order materials. Controlling inventory is accomplished
through scheduling production.
 Records do not produce control.
 Control is comparative & relative, not absolute. It is exercised through people with
varying experiences and judgment rules & procedures establish a base from which the
individuals can make evaluation and decision.

1.11 NEED OR INVENTORY CONTROL

Transaction motive:

Every firm has to maintain some level of inventory to meet the day-to-day requirement
of sales, production process, customer demand etc. In the finished goods as well as raw material
are kept as inventories for smooth production process of the firm.

Precautionary motive:

A firm should keep some inventory for unforeseen circumstances also like loss due to
natural calamities in a particular area, strikes, lay outs etc so the firm must have some finished
goods as well as raw-materials to meet circumstances.

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Speculative motive:

The firm may be made to keep some inventory in order to capitalize an opportunity to
make profit due to price fluctuations.

1.12 BASIC REASONS TO KEEPING AN INVENTORY:

There are three basic reasons for keeping an inventory:

 TIME:

The time lags present in the supply chain, from supplier to user at every stage, requires
that you maintain certain amount of inventory to use in this “lead time”.

 UNCERTAINTY:

Inventories are maintained as buffers to meet uncertainties in demand, supply and

movement of goods.

 ECONOMIES OF SCALE:

Ideal condition of “one unit at a time at a place where user needs it, when he needs it
“principle tends to incur lots of costs in terms of logistics. So bulk buying, movement and
storing brings.

1.13 INVENTORY CONTROL – TERMINOLOGY

Demand:
It is the number of items required per unit of time. The demand may be either
deterministic or probabilistic in nature.

Order cycle:
The time period between two successive orders is called order cycle.

Lead time:
The length of time between placing an order and receipts of items is called lead time.

Safety stock:

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 It is also called buffer stock or minimum stock. It is the stock or inventory needed to
account for delays in materials supply and to account for sudden increase in demand due to rush
orders.

Inventory turnover:
If the company maintains inventories equal to 3 months consumption. It means that
inventory turnover is 4 times a year i.e., the entire inventory is used up and replaced 4 times a
year.

1.14 STATEMENT OF THE PROBLEM

A study of inventory management at HLL is undertaken in order to know the inventory
performance and position of the company and to know the strength and weakness and to assess
the profitability of the company. Inventories constitute most significant part of assets of large
majority of the companies in India. Inventory a double edged sword is usually an asset of an
organization, if not used properly it will become liability. It is therefore absolutely very
important to manage inventories efficiently and effectively in order to overcome unnecessary
investment. And “To identify the problems/challenges involved in the Inventory Management
process at this company.” The firm is facing loss due to poor inventory management. The
analysis will be helpful to find out the reasons and position of the firm.

1.15 INTRODUCTION TO THE STUDY

An internship is aimed at creating an opportunity for the students to observe, learn,
assimilate and analyze the objectives and vision of the organization and functioning of the
various departments. This would enables the students get a practical real time experience of
various aspects concerned with the organization and to relate to its to the concepts and theories
studied so far in the classroom. This exercise would enable the future mangers to face the
challenges laying a head. This helps in understanding the organizational climate. In a null shelf
the study provide hands on experience for the students on the functional Areas of management.

HLL Life Care Ltd (Formerly Hindustan Latex) is a Government of India undertaking
company and it is established at 01 March 1986 under the ministry of health and family welfare.

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The company commenced its commercial production of condom, Since 1969 April 5 at
peroorkada factory which in Trivandrum, Kerala with production capacity 144 million prices a
year. During the year 1976. Production capacity doubled to 288 million pieces with of two more
lines on the molding section. The plant has since undergone continuous modernization over the
year and has an annual production capacity of 1066 million pieces of condoms. The plant was
setup in technical collaboration with komodo industries Inc Japan. Later HLL acquired the PRT
technology (Germen) for the production of condoms.

1.16 SCOPES OF THE STUDY:

The project to get a practical awareness of the function and management of the company.
It helps in exploring the various departments and familiarizing the organization culture and
watch understands the organization behavior to some extent. The study at HLL Life Care Ltd
reveals a picture of the functioning of an organization its objectives and the strategies of the
organization that helps is to establish itself as the world’s largest manufacturer.

1.17 OBJECTIVES OF THE STUDY:

 To analyze the company effective utilization of the inventory management.

 To analyze inventory management by using Ratio analysis of the company.
 To give suggestions for the improvement of the inventory management of the company.

1.18 LIMITATIONS OF THE STUDY

 Difficulty in optimizing the usage of some of the chemicals which are to be used in
excess subject to specific circumstances.
 Wastage due to destructive testing is not being recorded
 Stringent measures are not taken by the organization to sick on to the predefined
consumption norms which many reduce the significance of the study.

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  Redefining the consumption norms is possible only by doing actual experiments in the
plant.
 Difficulty of completion within a small time period.
 Data mismatch in some records due to data entry errors
 Unavailability of full-fledged data from the firm.

1.2 RESEARCH METHODOLOGY

Methodology is defined as “the analysis of the principles of methods, rules and postulates
employed by a discipline”. Methodology refers to more than a simple set of methods, rather it
refers to the rational and the physiological assumptions that underline a particular study.

1.2.1 METHODOLOGY INCLUDES THE FOLLOWING CONCEPTS:

 A collection of theories, concepts or ideas

 Comparative study of different approaches
 Critique to the individual methods

1.2.2 RESEARCH DESIGN:

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 Research methodology is a way to systematically solve the research problem. The
research design utilized in this study is descriptive.

1.2.3 PRIMARY DATA:

It was collected mainly through,

 Interview with deputy finance manager and employees of costing section.

 Export opinion from the manager

1.2.4 SECONDARY DATA:

The study was mainly based on data available from the annual reports and other records
of HLL. The necessary information was compiled from published annual reports, website,
project reports and journals. The cost sheet of the company was the main sources of secondary
data that was used for the analysis.

The secondary data were available from;

 Annual reports
 Compounding details register
 Materials consumption reports for latex and chemicals
 Waste details register
 Journals
 Books
 Internet

1.2.5 PERIOD OF THE STUDY

Past five years inventory details are collected and the study is made. The period of study
is from 2014 – 2018

1.2.6 STATISTICAL TOOLS USED FOR DATA ANALYSIS

RATIO ANALYSIS

A ratio analysis is a quantitative analysis of information contained in a company’s

financial statements. Ratio analysis is used to evaluate various aspects of a company’s operating
and financial performance such as its efficiency, liquidity, profitability and solvency. Ratio
Analysis as a tool possesses several important features. The data, which are provided by financial

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statements, are readily available. The computation of ratios facilitates the comparison of firms
which differ in size. Ratios can be used to compare a firm's financial performance with industry
averages. In addition, ratios can be used in a form of trend analysis to identify areas where
performance has improved or deteriorated over time. Because Ratio Analysis is based upon
accounting information, its effectiveness is limited by the

Distortions which arise in financial statements due to such things as Historical Cost
Accounting and inflation.

TREND ANALYSIS

Trend analysis involves the collection of information from multiple time periods and
plotting the information on a horizontal line for further review. The intent of this analysis is to
spot actionable patterns in the presented information. In business, trend analysis is typically used
in two ways, which are as follows:

Revenue and cost analysis

Revenue and cost information from a company's income statement can be arranged on a
trend line for multiple reporting periods and examined for trends and inconsistencies. For
example, a sudden spike in expense in one period followed by a sharp decline in the next period
can indicate that an expense was booked twice in the first month. Thus, trend analysis is quite
useful for examining preliminary financial statements for inaccuracies, to see if adjustments
should be made before the statements are released for general use.

Investment analysis

An investor can create a trend line of historical share prices, and use this information to
predict future changes in the price of a stock. The trend line can be associated with other
information for which a cause-and-effect relationship may exist, to see if the causal relationship
can be used as a predictor of future stock prices. Trend analysis can also be used for the entire
stock market, to detect signs of an impending change from a bull to a bear market, or the reverse.

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 2. REVIEW OF LITERATURE

1. Economic studies to analyze the factors that influence inventory accumulation in India are
based on time series and pooling of cross section of time series data pertaining to manufacturers’
inventories. Krishnamurthy’s study (1964) was aggregative and dealt with inventories in the
private sector of the Indian economy as a whole for the period 1948-61. This study used sales to
represent demand for the product and suggest the importance of accelerator. Short-term rate of
interest had also been found to be significant.

2. Sastry’s study (1996) was a cross-section analysis of total inventories of companies across
several heterogeneous industries for the period 1955-60 using balance sheet data of public
limited companies in the private sector. The study brought out the importance of accelerator
represented by change in sales. It also showed negative influence of fixed investment on
inventory investment.

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3. Krishnamurthy and Sastry’s study in 1970 was perhaps the most comprehensive study on
manufacturers’ inventories. They used CMI data and the consolidated balance sheet data of
public limited companies published by RBI, to analyze each of the major components i.e. raw
material, goods-in-process and finished goods for 21 industries over the period 1946-62. It was a
time series study but some inter industry cross section analysis had also been done. Accelerator
represented by change in sales, bank finance and short-term interest rate were found to be
important determinants. Utilization of productive capacity and price anticipations had been found
toe of some relevance. Another study conducted by them in1975 analyzed inventory investment
in the context of flexible accelerator with financial variables. Both RBI and Stock Exchange
Official Directory, Mumbai data for seven important industries had been taken for the period of
1956-69. Their study of pooled cross section was in current prices whereas time series analysis
based on RBI data was a constant price. OLS results showed the important influence of
accelerator, internal and external funds flow and fixed investment on inventory investment.
Rama Krishna Rao B., in his thesis ‘Materials Management in Heavy Engineering Industry’ a
case study of Bharat Heavy Plate & Vessels Limited (BHPV), Visakhapatnam in 1979, he has
evaluated the performance of materials management in BHPV and identified some problems
pertaining to materials management in BHPV in particular and heavy engineering industry in
general. The method of investigation involves documentary evidence and survey of expert
opinion. He has evaluated the existing purchase systems and lead-time involved in procurement
of materials and suggested that the long lead- time should be reduced. His study pinpointed the
excess inventory in terms of number of months cost of production in all the engineering units. He
also highlighted some of the problems in the area of materials management such as delay on the
part of customers in supplying their own materials, existence and disposal of surplus and non-
moving items, excessive lead time and excessive dependence on imports. He also found that the
administrative and procurement lead times of the company are on the higher side due to the
peculiar nature of the industry. He suggested the liberalized purchase procedures, increasing
financial powers to the personnel, opening up of liaison offices in various countries to reduce the
lead-time. In comparison with the BPE norms, the inventory levels of various stores items in
BHPV and the overall inventory accumulation in Heavy Engineering Group was relatively
higher and he suggested for drastic reduction in the inventory levels.

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4. Phaniswara Raju B produced a research work entitled ‘Materials Management in Andhra
Pradesh State Road Transport Corporation (APSRTC) in the year 1986. In his study, he examined
the materials management practices and purchasing systems in APSRTC on the basis of various
parameters like material consumption per vehicle, material consumption per kilometer, inventory
per vehicle, inventory in terms of number of month’s consumption etc. He highlighted some
major problems in the procurement of materials. The study was primarily based on secondary
data collected from published annual reports of APSRTC, the records of MIS, the reports on
performance of Nationalized Road Transport Undertaking of CIRT, Pune etc., coupled with
personal interview with various officials of the corporation. The study revealed the increasing
levels of materials consumption in APSRTC as compared to other undertakings. He observed the
absence of the use of important analytical techniques like value analysis and network techniques
in the purchasing system of APSRTC.

5. Hari R. Swami in his research work “Materials Management in Public Undertakings” has
evaluated the performance of materials management in the central public undertakings in
Rajasthan such as, Instrumentation Limited, Kota unit: HMT, Ajmer unit: Hindustan Zink
Limited, Debary unit; Hindustan Copper Limited, Khetri unit and Sāmbhar Salts Limited. The
study covered various aspects of materials management in these enterprises from 1977-78 to
1981-82. The methods of investigation include questionnaire interview, on the spot study and
deskwork techniques etc. It has been observed that the cost of materials accounts for more than
50 per cent of the total cost of production in the selected units of the study. Unfortunately, the
importance of proper materials management was not fully realized by public undertakings in
Rajasthan and very little attention has been paid so far, to the task of controlling investment in
inventories through the application of various scientific techniques of materials management.
The research opined that, materials management should not cover the inspection function, as it
requires an autonomous and independent status in the organization. The study revealed that the
lead-time in the selected public enterprises was considerably long and suggested to reduce
administrative lead-time by expediting purchase files. The study also revealed that the inventory
of selected public enterprises had been accumulated due to the following reasons; faulty

14
purchases, heavy rejections, high lead time, uncongenial organization, lack of scientific and
modern techniques of materials management, defective inventory control and inflationary
tendencies in the economy. He suggested that the inventory holdings could be reduced by
adopting integrated system of materials management, appointing qualified and trained inventory
managers, reducing lead time, setting and regulating consumption and stocking norms of raw
materials and other goods, applying modern techniques of materials management and identifying
slow and non-moving items. The study tested fully its hypothesis “the public enterprises had
suffered losses or earned low level of profits relates to the inefficient management of materials.
If the public enterprises followed standard techniques of materials management, they would not
only generate resources for their own expansion but would also have contributed towards
economic growth.” The very important reason for public enterprises having suffered losses or
earned low level of profits relates to the inefficient management of materials. Had public
undertaking in Rajasthan managed materials in an efficient and effective manner, they would not
only have generated resources for their own expansion but would also have contributed towards
economic growth.

6. Similarly, the IFMR’s survey “Inventory Management” summarizes briefly the findings of
four important surveys; it conducted in the area of inventory management practices in Indian
industry. A study on control practices in Indian industry conducted by the faculty members of the
Jamnalal Bajaj Institute of Management Studies, University of Bombay concluded that most of
the companies were still guided by rules of thumb and intuition in deciding on how much capital
to invest in inventory. Out of the 224 companies approached, 36 responded and among them only
13 reported using inventory control techniques. Only six out of the 13 companies took into
account inventory costs in controlling inventories.

7. Rama Krishna Rao B., in his article ‘Some Problems of Materials Management’, reviewed
the inventory position in central public sector heavy engineering units and highlighted the
problems faced by engineering units in particular and all central public sector undertakings in
general. Roy Chowdhury Bipul K.’s ‘Materials Management Availability Research’ article
outlined some of the salient points necessary for the development and disposal of availability

15
research in the area of materials management. Some methods are also discussed and these can be
used for setting certain types of research work.

3. INDUSTRY PROFILE

Health care is the world’s second largest service sector with an estimated size of US$5
trillion. The health care industry is considered an industry which includes peoples exercise of
skills of a service related to the preservation or improvement of the health of individuals who are
injured, sick, disable or infirm. The delivery of modern health care. Depends on an expanding
and diversified group of trained professionals coming together as an interdisciplinary team. The
health care industry is one of the world’s fastest growing industries. Consuming over 10% of
gross domestic product of most developed nations, health care can from an enormous part of a
country’s economy.

Health care in India features a universal health care system run by constituent states and
territories of India. The constitution charges every state with “raising of the levels of its people
and the improvement of public health as among its primary duties”. Health care plays an
important role in a nation’s economy and spending on health care industry reflects on the
determinates of GDP of a country.

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 Central Government effort at influencing public health have focused on the five year
plans, on coordinated planning with the states and on sponsoring major health programs.
Government expenditures are jointly shared by central and state governments. Goals and
strategies are set through central – state – private sector in India spending on health care was
about 1.5 times as much as government spending.

Growth and Development of the company

The Indian healthcare system can be divided into national, state, district, community,
primary health care center and sub center levels. The national levels is the union ministry of
health and family welfare, department of AIDS control and central health services. The union
ministry is responsible for the formulation of health policies and their implementation across the
country. The department of health responsible for matter pertaining to family welfare,
reproductive health, maternal health, and pediatrics information education and communication
co- operative with NGO’s international.

3.1 ORIGIN AND HISTORY:

Hindustan latex is the world’s largest manufacturer of condoms. The company

manufactures rubber prophylactics. It has a plant at Balasore, Orissa. It came out with a public
issue in jun.’90 to part – finance the project. The main raw material required by the company is
latex, which is procured from Kerala and Tamil Nadu. It markets its condom under the Adam
brand name. During 1993 – 1994, the company undertook a diversification – cum – expansion
program to expand its plant capacity for latex prophylactics from 160 mln pa to 400 mln pa and
to set up a unit (inst. Cap : 518 mln pa) to manufacturer finger costs. The company exports its
product to Switzerland, Canada, South Korea, Lithuania, and Baltic Republics, Russia, UK,
Korea and the CIS countries. The company products are registered with the Food and Drug
Administration (FDA) of USA. The South African Bureau of Standards (SABS), the ministry of
Health and Medical Industry of the Russian Federation, Department of Drug & Medical
Equipment, Ministry of Health, Uzbekistan and the Federal Ministry of Health (FMH) Nigeria,
during 1999 – 2000, the company received the grant of license for Private Bonded Warehouse
under the 100% EOU Scheme. This unit has been set up as an expansion of its existing unit as

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“Polar Latex ltd, EOU Division”. In 2000 – 2001 the company’s Quality Management System
has been certified in confirmation with Quality Management Standard (ISO 9000, 1994) by
DNV. The company’s system is complying with the requirements of all the international
standards. The process of accreditation is underway. This will help the company to enter in to the
European market. The company undertook major expansion for conversion of finger cot lines
into condom manufacturing lines. As a result the capacity will increase from 570 mln pcs to 730
mln pcs. It has obtained equipment’s from M/s Shenzhen Corporation, Korea. The installations
of machineries are currently under progress and the company expects to commence operations
shortly.

3.2 HEALTH CARE: TAMILNADU SCENARIO

Good health is an essential pre – requisite which contributes significantly both to the
improvement in labor productivity and human resource development. Health care is widely
recognized to be a public good with strong positive externalities. Universal access, of an
adequate level of care, with equitable distribution of financial costs, cost effective use of the
results of relevant research and special attention to vulnerable groups such as children, women,
disabled and the ages key component of a civilized society. The role of government is crucial for
addressing these challenges and achieving equity in health. To achieve this, Government of
Tamil Nadu has converged more resources on health and nutrition, strengthening health
infrastructure to reach world class standard, augmenting medical manpower resources and
encouraging health outreach activities. The primary, secondary and tertiary health care is
delivered efficaciously to the people at the bottom of the economics pyramid. Considerable
achievements have been made in Tamil Nadu in health indicators like life expectancy at birth,
infant mortality rate. Among the major states Tamil Nadu ranks ‘fourth highest’ in terms of life
expectancy at birth, ‘ second lowest’ next only to Kerala in terms of infant mortality rate and
birth rate, ‘third lowest’ in terms of maternal mortality rate and ‘tenth lowest’ in terms of death
rate. Small pox, polio and guinea worm have been eradicated.

The twelfth plan (2012- 2017) has focused its attention on reducing infant mortality rate
to 13 per thousand live births and maternal mortality rate to 44 per lakh live births, universal
access to public health services, prevention and control of communicable and no communicable

18
diseases, maintaining gender and demographic balance, revitalize Indian systems of medicine
and promoting a healthy lifestyle.

3.3 Quality Dimension of Healthcare Delivery

The health care system consists of a mix of public and private sectors. The provision of
healthcare facilities is related to preventive, curative and promotive services. Networks of
healthcare facilities at the primary, secondary tertiary level are run mainly by the state
Government. Tamil Nadu is totally committed to address the major concerns and to bridge the
gap in the existing health infrastructure and to provide accessible, affordable and equitable
healthcare of the highest order to the public. Considerable achievement have been made with
regard to the core health indicators. The health of the population has been assessed by taking into
account different indicators like infant mortality rate (IMR), Death rate, Birth rate, Total fertility
rate (TFR), Maternal Mortality rate (MMR) and life expectancy at birth (LEB). According to
these indicators there was a dramatic improvement in the health situation of the public in the
state. The state and experienced a diminishing tend with respect to Infant Mortality Rate (IMR),
Birth rate, Total Fertility rate (TFR), Maternal Mortality Rate (MMR) and an upward trend in
Life Expectancy at Birth. The good accomplishments are the result of many factors including
greater health consciousness amongst the public, improvement in the female literacy rate and
female empowerment, growing industrialization, faster urbanization, rising nutritional of modern
medical practices in diagnosis and treatment of various ailments and effective administration of
universal immunization. The state – wise comparison of health indicators has help to bring to
light the following findings:

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 4. COMPANY PROFILE

Type : Public

Industry : Healthcare

Founded : 1966at Thiruvananthapuram

Head Quarter : Thiruvananthapuram, Kerala, India.

Product : Condom

Slogan : “Innovating for Healthy Generation”

Website : www.lifecarehll.com

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4.1 Vision, Mission, Purpose and Value of the Company.

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  VISION

The vision of the company is to become an INR 10,000 crore global health care company by
2020.

HLL will establish itself as a leader in its core activities through a process of continuous
innovation and technology as well as quality to be internationally competitive participatory
approach in order to:

a) Provide best value to the customer.

b) Be an employer of choice.

c) Promote the cause of family health in general and women health in particular.

 MISSION

To accomplish the corporate vision, HLL has outlined a mission to be a world class health
care company by the year 2020 with focus on five key areas namely:

a. Business
b. Customer
c. Innovation
d. Employee Satisfaction
e. Social Sector initiatives.

PURPOSE

The very purpose of business at HLL is to provide high – quality products and services at
affordable prices.

VALUES

HLL has a value charter – TTT – Trust, Transparency and Teamwork. It symbolizes the
philosophy of HLL; its reason for existence, values and principles if follows in its daily
activities. It also provides a common direction for all employees of HLL; the way to conduction
personal and professional lies.

1. TRUST

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  HLL believe that trust creates an atmosphere of mutual respect and support.
 HLL shall never compromise doing the right things at the right time consistently.
 HLL shall practice what they profess and thereby build trust among ourselves and all
their stakeholder’s.
2. TRANSPARENCY
 HLL shall exhibit honesty and accountability in all their activities.
 HLL shall encourage active participation of all stake holders in their decision – making
process.
 HLL shall practice Equity, Fairness and justice at work.
3. TEAM WORK
 HLL believe that excellent outcomes can be achieved only through team work.
 HLL shall build teams committed to company goals.
 HLL shall foster friendliness, camaraderie and selflessness.

HLL life care ltd has adopted a code of business conduct & Ethics for board members and
senior management, enterprise – wide risk management policy and has constituted qualified and
independent audit committee of the board of directors. It also has a formal statement of board
charter that sets out the role, structure, responsibilities and operation of the board of HLL and its
delegation of authority.

4.2 HLL GROUP COMPANIES

a. HITES (HLL Infra Tech Services Ltd)

b. HBL (HLL Biotech Ltd)
c. HLFPPT (Partners for Better Health)
d. GAPL (Goa Antibiotics and Pharmaceuticals)
e. HMA (HLL management academy)
f. Life Spring (Maternity Hospital)

4.3 QUALITY MODEL IN HLL PEROORKADA PLANT

5S - 5S engages people through the use of 'Standards' and ‘Discipline'.

It is not just about housekeeping, but concentrating on maintaining the standards &
discipline to manage the organization - all achieved by upholding & showing respect for the
workplace every day.

The 5 Steps in 5S are as follows:

24
  Sort: Sort out & separate that which is needed & not needed in the area.
 Straighten: Arrange items that are needed so that they are ready & easy to use. Clearly
identify locations for all items so that anyone can find them & return them once the task
is completed.
 Shine: Clean the workplace & equipment on a regular basis in order to maintain
standards & identify defects.
 Standardize: Revisit the first three of the 5S on a frequent basis and confirm the
condition of the workplace using standard procedures.
 Sustain: Keep to the rules to maintain the standard & continue to improve every day.

4.4 INTEGRATIVE SYSTEM

The company follows the concept of an integrative system which is:

ISO 9001 ISO 50001

ISO 14001 ISO 18001

The ISO 9001, ISO 50001, ISO 14001 and OHSAS 18001 are integrated with triple bottom line
approach of Total Quality Management, which is people, plant, and profit.

4.5 EMPLOYEES:

The competence and commitment of the employees, sustained for over decades, have
made HLL a fast growing global entity. This is reflected in the energy of more than 2700
employees. HLL provides demanding and challenging opportunities to each employee. Through
opportunities training and mentoring programmers, business plan meets and regular
communication. Employees are made to align to the organization’s culture, vision and purpose.

4.6 MANUFACTURING PLANTS:

 Peroorkada factory, Thiruvananthapuram(PFT)

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  Akkulam factory, Thiruvananthapuram(AFT)
 Kanagala factory, Cochin(KFC)
 Kakkanad factory, Gurgaon(MFG)
 Pharma factory, Indore(PFI)
 Irapuram factory, Cochin(IFC)

4.7 PRODUCTS OF THE HLL

MOODS – Moods ultra-thin 3’s/ 10’s/20’s

Moods Supreme Dotted 3’s/ 10’s/20’s

Saheli: Non- Stereological Oral Contraceptive Once a week Pills

Ustad 3’s/ 8’s – Rural condom brand

Rapid Test kits: Pregnancy Test

Kits/ Chickankunya/ Malaria/ Dengue/ HIV Hep – T

Emergency Contraceptive Pill: Proventil

Ayuirvedic OTC products – proprietary License from Arya Vaidiysaala Kottakal.

4.8 QUALITY POLICY

a. Provide affordable healthcare solution focusing on inclusiveness, conforming to

international standards, enabling people to lead healthy and happy lives.
b. Achieve organizational excellence through continual improvement by adoption of best
technologies and practices in all areas.
c. Market products and services globally delivering highest value for customers through
focus on innovation, quality, and R&D relationship management.
d. Be an organization meeting highest standards in Corporate Governance and Corporate
Social Responsibility.

4.9 PRODUCTION FACILITIES:

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  Peroorkada Factory, Trivandrum (PFT)

The manufacturing unit at Peroorkada, in Thiruvananthapuram district of Keralawas set

up in 1969 in technical collaboration with M/s Okamoto Industries Inc., Japan. The plant has
undergone continuous modernization over the years and has an annual production capacity of
1600 million pieces of condoms. The facility is equipped with modern machines and equipment
for production, inspection and quality testing, conforming to GMP and meets international
standards. The unit produces many variants of condoms with different flavors and textures.
Condoms manufactured in this facility have product certifications such as CE, KITE, SABS, NF,
CMD CAS and meets a range of international quality specifications and standards such as: WHO
2003, 510K, ISO 4074:2002, SANS ISO 4074, ASTM D 3492 and GOST - 4645-81. The facility
has certifications under ISO 9001:2008, ISO 14001:2004, ISO 13485:2003, OHSAS
18001:2007, WHO GMP and NABL as per ISO 17025:2005.

 Akkulam Factory, Trivandrum (AFT)

Akkulam Factory in Thiruvananthapuram district of Kerala is the state of the art facility
for manufacture of Blood Bags and other medical devices namely Surgical Sutures (Absorbable
& Non Absorbable), Intrauterine Devices (Copper T) and Mesh Implant for Reinforcement of
Connective tissue structure. The above products are manufactured in class 10000 and class 100
Clean room facilities maintained in a centrally air-conditioned atmosphere. The products have C
E International Quality Certification and the manufacturing facility has been certified for
conformity with international quality standards-ISO 9001,WHO GMP, ISO 13485, OHSAS
18001 and ISO 14001.The annual production capacity of blood bags at the factory stood at 11.5
million pieces, copper IUDs - 5.5 million pieces, surgical sutures - 1,25,000 dozens and tubal
rings - 2.5 million pairs.

 Kanagala Factory, Belgaum (KFB)

The Kanagala plant in Belgaum in the state of Karnataka commenced operations with the
production of condoms in 1985 using Japanese technology. This unit underwent diversification in
1992 with the tableting facility for birth control pills - Mala-D/N and the formulation and
tableting of Saheli (Centchroman) the indigenous, non-steroidal once-a-week pill. The tableting
of Emergency Contraceptive pills started in 2003. Commercial manufacturing of women

27
healthcare products commenced in 2006. KFB has also added a world-class hormonal/steroidal
formulation plant – UNIPILL Block in 2012. The manufacturing unit has GMP and quality
management systems (QMS) like ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007 and
ISO 13485:2003.

 Kakkanad Factory, Cochin (KFC)

HLL’s female condom manufacturing facility at Cochin Special Economic Zone,

Kakkanad in Kerala has been set up in technical collaboration with M/s. Female Health
Company (FHC), US. It is the second generation of female condoms made from Synthetic Nitrile
latex, the product generically being termed FC2. The installed capacity of the plant is 7 million
pieces of FC2 per year. In addition, KFC has a fully automatic testing and packing facility for
male condoms with an annual capacity of 150 million. This facility mainly caters to the export
market. KFC has the ISO 9001:2008, ISO 13485:2003, CE Mark and WHO GMP certification
for manufacturing female condoms (FC2) certified by M/s DNV and ISO 9001:2008,ISO
13485:2003, CE Mark and WHO GMP for male condom facility certified by M/S DNV.
KFC has also received the NF Mark certification from M/s LNE for male condom facility and is
also approved by many institutional buyers like IDA, Mission Pharma and UNFPA for
the supply of male condoms. In addition to the product certification, M/s TUV, with
ISO 18001:2007 and ISO 14001:2004 certifications for safety, also certifies KFC health and
environment compliance.

 Manesar Factory, Gurgaon (MFG)

HLL has its in-vitro immuno diagnostics kit manufacturing facility at Manesar in
Gurgaon. It has an installed capacity to manufacture 26 million rapid pregnancy test kits per year.
The unit commenced operations in November 2007. The unit manufactures rapid test kits for
detection of metabolic hormones such as human chorionic gonadotropin (hCG) in urine and
prognosis of diseases such as Dengue, Malaria (different strains), Kala-azar (leishmaniasis), TB,
Chikungunya and other infectious diseases. The facility has Quality Management Systems like
ISO 9001:2008, ISO 13485 and CE mark according to IVD 98/79/EC directive for pregnancy
test cards for professional use brands like Makesure, P-Test and Nishchay.

 Pharma Factory, Indore (PFI)

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 Indore, the commercial capital of Madhya Pradesh opened its doors to a pharma
production facility in 2010. The facility manufactures a range of pharma products which include
formulations such as tablets, capsules and Oral Rehydration Salt. PFI also supplements the
existing production facility of KFB in the area of women’s healthcare products.

 Irapuram Factory, Cochin (IFC)

Irapuram Factory, Cochin (IFC) is located at the Rubber Park near Perumbavoor, Kerala.
IFC facility is the molding hub for male and female condoms. The installed capacity for male
condom molding is 240 mpcs/ year and for the female condoms is 25 mpcs/year. The total
constructed area in the 306 cents plot is 4650 square meter.

4.10 CERTIFICATIONS IN HLL

Facility Certifications

 ISO 9001 – Quality certification

 ISO 13485 – Medical Devices Standard
 ISO 50001 – Energy Management System
 ISO 14001 – Environmental safety standard
 ISO 18001 – Laboratory standard (sample testing and calibration)
 ISO 170025 – NABL (National Accreditation Board for Laboratory)

Product Certifications
 CE-Mark – for selling in European
 KITE Mark – for selling in United Kingdom
 SABS – for selling in South Africa
 NF – for selling in France
 CMDCAS – for selling in Canada

4.11 SAFTY, HEALTH and ENVIRONMENT POLICY

HLL life care limited is committed to protect environment, eliminate occupational

hazards and ensure safety of employees and subcontracts through:

a. Monitoring and control of the impact of its activities, products and services on a
continual basis.
b. Compliance of applicable legal and other requirements.
c. Adopting safe operating practices with an emphasis on social accountability.
d. Facilitating employee training and their involvement.

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 e. Pollution mitigation through adoption of best practices.
f. Conserving materials, energy and reducing waste at source and encourage usage of
renewable energy sources.
g. Periodic review of safety, health and environment management system.

4.12 OUR PARTNERS

In its search for becoming a truly world-class provider of healthcare products and
services, HLL has been seeking to adapt knowledge from its partners. HLL has over the years
been networking with various corporate organizations, development agencies and NGOs by
combining strengths and capabilities of several world leaders. Some of them are listed below:

 Okamoto Industries Inc. for male condoms.

 Female Health Company (FHC) for manufacture of Female Condoms and its promotion.
 Finishing Enterprises, USA for Copper T IUD.
 Helm, Germany for distribution of DMPA (Depot Medroxyprogesterone Acetate) in
India.
 Arya Vaidya Sala (AVS), Kottakkal, Kerala, for Natural Ayurvedic products.
 Bharat Biotech International Ltd., Hyderabad for Hepatitis B and Typhoid Vaccines.
 Chengdu Institute of Biological Products, China for supply of JE Vaccines to
Government of India.
 Cheng Da Biotechnology (CDBIO), China for marketing of Human Anti-Rabies Vaccine
in India.
 Cycle Technologies Inc., USA for manufacture and distribution of Cycle Beads in India
and abroad.
 More than 300 NGOs for implementing population stabilization and HIV/AIDS
prevention and control programs.

4.13 GLOBAL PERSPECTIVE

With the changing socio-political climate, global health programs are constantly seeking
diverse solutions in the areas of medicine and healthcare. HLL provides the perfect answer to
many questions that the world faces in healthcare, thanks to its extensive experience, innovative
technologies and ample resources which today reach over 115 countries spanning the seven
continents. Its consultancy services and products are part of the global healthcare packages of
international agencies such as UNPFA, UNOPS, UNHCR, WHO, PSI and IDA.

4.14 GLOBAL COMPETITORS

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 a. US surgical (USSC), which is relatively new into the industry.
b. ANTZ Latex Private Limited, Singapore.
c. ANSELL Ltd, Australia.
d. Sino hem Nimbi Medical Company Ltd, China.
e. Green Mate Corporation, South Korea.

4.15 PRODUCT PROFILE

DETAILED PRODUCT PROFILE

PRODUCT BRAND VARIETY

Contraceptive Moods Ultrathin Supreme Dotted
All Night Extra Long
Scented (Rose, Musk,
Jasmine) Chocolate Flavor
Banana Flavor Strawberry
Flavor Ribbed Colored
Glow

Share Share 3S
Nymph Nymph 3S
Nirodh Deluxe Nirodh
New Lubricated Nirodh
Super Deluxe Nirodh
Rakshak SIPPSA
Telungu
Ustad Ustad 3S
Crezendo Crezendo
Oral Re-Hydration Salt Jal Jeevan Jal Jeevan
Blood Transfusion and HLL HEAMOPACK HLL HEAMOPACK
Intravenous Set Preventol Preventol
Intra-Oterine Device T-Care T-Care

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Medical Plaster Plaster Aid Plaster Aid
Surgical Sutures Hicon Hicon
Hisil Hisil
Hinsurg Hinsurg
Hincryl Hincryl
Hincocryl Hincocryl
Hindox Hindox
Hinglact Hinglact
Hi-tech Hydrocephalus Shut Ceredrain Ceredrain
Needle Destroyer Needle Destroyer Needle Destroyer
Tube Sealer Tube Sealer In Care Tube Sealer In Care
Tissue Expander HL SUB CUTEX HL SUB CUTEX
Instant Needle and Syringe Instant Needle and Syringe Instant Needle and Syringe
Destroyer Destroyer Destroyer
Blood Collection Monitor Hi Care Hi Care
Female Condom Confidom Confidom
Velvet Velvet
Tubal Rings Tubal Rings Tubal Rings
CBD Herbs Berries Chyauanules Chyauanules

They can be further explained as follows:

HLL life care limited is providing wide range of products for different sections of market.
The details are given below as follows:

1) Condom

Condoms are major profit earning components of HLL Lifecare Ltd. Condoms products are
meant to prevent against sexually transmitted disease (STD) like Acquired Immune Deficiency
Syndrome (AIDS).

Different brands of condoms produced by HLL Lifecare limited are:-

 Nirodh
 Deluxe Nirodh
 Super Deluxe Nirodh
 Moods
 Moods Supreme
 Rakshek
 Gay
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  Ustad
 Share
2) Contraceptive Tablets

Contraceptive tablets are taken by women to avoid unwanted pregnancy. Different brands of
contraceptive tablets produced by HLL Life are:-

 Saheli
 Mala-D
3) Blood Bags

During earlier years blood bag were imported, but HLL Lifecare started manufacturing
of blood bag from 1995 with the technical knowhow from ‘Sree Chithra institute of Medical
Science and Technology’ Trivandrum. A blood bag per annum is up and running at the Akkulam
Factory. Different types of blood bag produced in HLL Lifecare Ltd are:-

 Single
 Double
 Triple
 Pediatric
 Transfer bag
4) Copper – T Intra-Uterine Device

Copper – T is an IUD device used by women to protect against unwanted pregnancy. Use of
Copper-T leads to lower fertility rates in women. Commercial production of Copper-T is
installed. It has been useful for a period of 5 years.

Two brands of Copper-T products of HLL Lifecare Ltd are:-

T- Copper 200B

T- Copper 380A

5) Hydrocephalus Shunt

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 Hydrocephalus Shunt is used to regulate the pressure inside the head of children having
abnormal brain fluid condition. HLL Life care started the manufacture of hydrocephalus shunt in
the year 1994 at Akkulam factory.

6) Surgical and Examination Gloves

Need of total sterility is necessary in today’s world of medical science. With a view of
providing this HLL Life care Ltd entered in to the production of surgical and examination gloves,
both sterile and non-sterile. The gloves are of export quality and subject to ASTM and ISO
standard. It also manufactures produce free and chrome therapy gloves.

7) Survival Sutures

Aiding the heading process is a special type of thread called surgical sutures. HLL Life care
Ltd planned to make available the sterile eyeless needled surgical sutures which are synthetic and
surgical catgut sutures that will come in two types. Brand name, HINCON.

8) Additional Products
 Intra-Uterine-Device
 Oral Rehydration Salt
 Iron and Folic Acid
 Medicated Plaster
 Structures
 Needle Destroyer
 Blood Collection monitors tissue expander
 Mediguard Surgical Gloves (Sterile)
 Blood bag tube seater

4.16 NATURE OF WORK UNDERTAKEN

PAYROLL FUNCTION

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 Payroll refers to the process by which employs receive their salary. Functions involve
balancing and reconciling payroll data and depositing and reporting taxes. The payroll section
takes care of wages deductions, record keeping and verifying the reliability of pay data. The
payroll section delivers payroll checks, maintain compliance with tax laws, records paper works
for new hires and edits existing employee files.

Depending on the size of the business, the payroll section may have one or two
employees or several employees.

1. PAYROLL SECTION DUTIES

Broadly speaking, the payroll section pays employees accurately and on time. A wide
range of duties encompass this process.
 Time keeping:

During payroll processing, the time keeper gathers time keeping data. She calculates time
worked, including overtime. She consults with employee’s managers or supervisors on time card
issues and verifies that the data is correct before pay check processing occurs.

 Pay check processing:

The pay check process or verifies that the payroll system has the correct compensation
data for each employee. This includes salary, hourly rates, regular hours over time hours verifies
other types of pay such as bonuses, commissions, severances, piece rate, expense imbursement,
back pay and retroactive pay increases.

Other types of compensation include bereavement, vacation, sick, personal and holiday
pay. She confirms pay check deductions such as federal income tax, social security tax, Medicare
tax, state and local taxes, wage garnishments, union dues, retirement contributions and health
insurance premiums.

2. RECORD KEEPING

35
 Federal law says employers must keep payroll data on file at least three years. Employers
must keep documents that determine wage calculations, including time cards, piece rate tickets,
deductions from or additions to wages and time schedules for two years. The payroll sections
must comply with federal and state record keeping criteria.

3. EMPLOYEE BENEFITS

Employee benefits processing is essentially a human resource function; however human

resources and payroll often go hand in hand. For example, both departments work together so
employers do not take more vacation. Personal or sick time than they have available, and if they
do, both departments collaborate to correct the balances. Other shares duties including handling
401(k) accounts; medical, dental, vision, disability and life insurance; parking and transit fees
expense accounts; dependent care reimbursement and health saving accounts, and workers
compensation.

4. PAYROLL ACCOUNTING

Through payroll accounting, the company tracks wages paid, deductions from employees
pay checks, and all employer - employee’s expenses. Depending on the structure of business,
finance department handling payroll accounting. Duties include annual w- 2 processing,
paycheck tracking, issuing stop payments, reconciling pay roll data, filing and reporting payroll
taxes and employee insurance and maintaining assurance accounting records.

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4.17 DEPARTMENTAL PROFILE

4.17.1 FINANCE AND ACCOUNTS DEPARTMENT

Organization Chart

DGM (F)

DM (F)

SAM (F)

JO

Supt

Employees

Description: -
DGM - Deputy General Manager
DM - Deputy Manager
SAM - Senior Assistant Manager
JO - Junior Officer
Supt - Superintendent

37
The company reinvests the profits to meet the working capital. This enables the company to
operate without outside borrowing. A separate file is maintained for every supplier. In case of
extra item supplied by the supplier, purchase department sends an amendment order to finance
department on bills are prepared accordingly and a copy will be send to stores section.

If the supply is less than the order placed no payment is made unless and until full
quantity of material is supplied. The types of payment made to suppliers are:

1. Advance payment

2. Payment against credit

3. Payment through bank

Functions: -

 Suppliers Bill / Party Bill section

 Payroll Section
 Internal Audit Section
 Costing Section
 Ledger Section
 Cash Section
 Finalization of Accounts
 Working Capital

1. Suppliers Bill / Party Bill Section

This section is concerned with matters relating to purchase of goods and raw materials.
The Material Receipt Report (MRR) prepared by the stores department is send to this section
during the purchasing function. The MRR in addition to the suppliers invoice sends a copy of the
purchase order is to be send to be maintained by this section in order to send the suppliers bills.

2. PAYROLL SECTION

This section deals with salary computation with respect to attendance, overtime work,
leave and recoveries in accordance with time office and personal department. Vouchers have
been sanctioned and cash/cheque issued from the cash section. Salary account is prepared
monthly. Advance amount is given to employees are recovered from next month’s salary.

38
Allowance like festival allowance, house rent allowance, medical allowance and dearness
allowances etc. are given to the employees.

The details regarding attendance of the employees are received from the Time Officer and
an Accountant of the information received and taking in to consideration statutory deduction;
loan and the salary bills are prepared. This section also deals with TA bills, medical advance
settlements etc.

3. INTERNAL AUDIT SECTION

Scrutinizing of all personal files of all employees of the unit relating to annual increment,
promotion, transfer etc. Scrutinizing all purchase proposals, comparative statements connected
with supply order and purchases. Scrutinizing pay fixation statements, arrears pertaining to pay
provision and other connected work of all employees. Securitizing of several specific cases apart
from the above work as directed by top authority

4. COSTING SECTION

Information required for costing is obtained from systems through the report generated by
MIS report includes closing stock, production, conception etc. The costing done here is process
costing and prime costing is obtained.

The new variances that add to cost are identified and there costs are ascertained. This
section prepares monthly / quarterly financial reports. In addition to those they also prepare
variance reports, which show the deviation in quantity, and cost, which is used to check and
regulate the consumption of such items.

5. LEDGER SECTION

This section is concerned with the maintaining of ledger accounts.

6. CASH SECTION

This section deals with all payment to be made to parties in the form of cash or Cheques.
It further deals with the payment of the salaries and wages of the employees and workers.

39
Finance department undertakes the budget preparation for the organization. The budget is
prepared considering the budgetary needs and requirements made by all departments and section.
The budget proposals are put forward to the Board of Directors for sanction.

7. FINALIZATION OF ACCOUNTS

The section deals with preparation. Co-ordination & assists in the preparation of final
accounts of the company. It is also used to assist the statutory auditors of the company.

8. WORKING CAPITAL

HLL Life Care Ltd. Kept 10 crore rupees as working capital. This amount is kept in State
Bank of India. The amount will issue based on inventory, credit ratio etc.

40
4.17.2 QUALITY ASSURANCE DEPARTMENT

The quality department is divided into two main departments which are:

a) Half Product Quality Assurance

b) Full Product Quality Assurance

Half Product Quality Assurance

Production time for a lot of 6000 pieces is 45 minutes. These lots then go for half product
testing. Half product is the product that comes out of vulcanizing machine. This type of testing
mainly consists of visual checking. A sample of 40 randomly selected condoms from each lot is
tested for the following:

 Oil
 Dust
 Folding
 Breakage
 Wrinkle
 Inside Sticking
 Not Uniform
 Bump
 Weak Spot
 Scratch
 Visible Hole
 Edge roll
 Printing not proper
 Nipple cream
 Foam
 Water dripping
 Improper Vulcanizing

Full Product Quality Assurance

In this section various tests are conducted to measure strength of the condoms, presence
of holes, etc. Different types of tests are conducted in these sections which are:

 Burst Volume & Burst Pressure Test

 Water Leakage Test
 Package Integrity Test

41
  Lubricant Quantity Test

Thereafter send for quality checking. The qualities checking in HLL are of two types:-

1) Sample Check
2) Random Check

1) Sample Check:

In sample check 60 pieces of samples are taken and checked for quality.

2) Random Check:

In random checking 40 pieces are taken and checked visually. The passed lots are sending
for 100% quality check such as:

a) Water Leakage Test

b) Burst Volume & Burst Pressure Test (Inflation Test)
c) Integrity Test
d) Lubricant Testing
e) Electronic Pinhole Testing

a) Burst Volume Burst Pressure Test:

In this test the condoms are subjected to pressure. The pressure and volume will be
determined in advance normally the pressure is chosen as 1 kilo Pascal and volume is 18.51 for
53 mm and 14.81 mm condoms. If more than 8 pieces of 310 samples are failed in this test, then
the batch will be discarded.

b) Water Leaking Test:

Here 40 samples are taken from each lot and 300ml of water is taken in each sample and
kept for some time. If more than 20 defects are found information given to the inspection
supervisor and information is passed to the production department. There are mainly two types of
water leakage test:  Hang and Squeeze Method  Hang and Roll Method

c) Integrity Test:

42
 Here 30 condoms are taken randomly from a pack and kept in a jar and applying a
pressure of 50+/10 Kpa. If the packs swell, it indicates that there is no air in the pack. This means
a good one if the pack doesn’t swell, it indicates that the packing is not good.

d) Lubricant Testing:

Each condom should contain minimum 200mg of lubricant, if the oil content is less than
prescribed amount, then the whole lot will be rejected.

e) Electronic Pinhole Testing:

After maturation period, each condom from the lot is manually covered on the steel
moulds provided in the automatic electronic pinhole testing machines. The steel moulds are fixed
in a continuality-moving conveyor. Here the electrical resistance of the film is measured to
examine the products, which are subjected to 100% electric testing to separate them with pinhole
and weak spots. The good condoms are then subjected for further quality checks.

4.17.3 INSPECTION DEPARTMENT

Inspection

Actually Inspection Department comes under the QC department but for ensuring better
quality the company management keeps the inspection department a separate wing.

43
 This department is in charge of inspecting the quality and durability of the product. They
check the product in the time of manufacturing and in the idle of process. The samples were
taken in random basis from the whole serial of production.

At the last the products are sent to final inspection department and there is 100%
guaranteed electronic pinhole testing and is done through most modern Japanese machines.

There are two types of testing for the final product:

1) Wet – type test

2) Dry – type test

Functions:-

 Incoming material inspection

 In process inspection of products at various stages of production
 Final product testing and assuring quality of outgoing products
 Statistical Analysis
 Handling of customer complaints
 Maintaining of ISO 9002 quality systems
 Maintaining of quality systems as per the requirements in medical service directive

4.17.4 ELECTRONIC TESTING DEPARTMENT (ETD)

The half products are send to the inspection department, where 100% electronic testing is done.
The condoms had been tested for pinholes using electronic pinhole testing machine. The process
follows manual, electrical and mechanical device. There are two types of pinhole testing
machines:

44
  Wet Type
 Dry Type

The wet type machine is used to remove the powder, which fills the small holes in the condoms,
detects any hole in the condoms, and makes the condom clean and dry the condom by passing it
through a heating chamber. The dry machine consists of a carbon rubber mechanism, which is
provided with a high voltage which separates the bad condoms from the good ones. In this test,
the condoms are wrapped on steel moulds and passed through a carbon brush which has charged
by electric voltage up to 1600 volts. When the mould is passed through the brushes, any pinhole
on the condom can be detected. The good condoms are sending to the packing department.

Functions:

The functions of ETD department are to test & roll of condoms in Electronic Pinhole
machines. ETD receives condoms manufactured by HLL as well as bought up from other sources
passed by HPQC (Half product Quality Control) for testing in EPT (Electronic Pinhole Testing)
machines.

4.17.5 Material Testing (MT) & Research and Development (R&D)

Material Testing

To maintain high quality products providing to the society, HLL Life care Limited has a
material testing lab which checks the quality of raw materials supplied to the company. This
section keeps a consistent watch over the inputs and reports its findings to the concerned

45
departments. This section also is entrusted with the design and art work of packages and cartons
to ensure that all displayed as per statutory requirements.

a) Receiving Raw Materials:-

The raw material used is latex. All the raw material includes rubber and other chemicals such as
tamol, darvan-I, darvan-II, Sulphar, Zinc Oxide are received in barrels and accepted after testing
and getting clearance in the laboratory.

b) Sample Testing:-

Random sample of raw latex is taken to the laboratory here with latex is tested for various
properties like acidity, viscosity, flow rate, PH value, mechanical stability of the latex etc. Only
when all properties are satisfied, they are taken for further processing.

Research & Development (R&D)

HLL Life care Limited gives more importance to Research and Development department.
As the company is in contraceptive and healthcare industry, which is highly consumer sensitive
industry, more care has to be given to research and development activities. During the year the
company proposes direct investment to strengthen its R&D.

R&D is the main center in corporate head office which keeps the presence of their
product alive in the market.

The R&D is concerned with the development of new and innovative products. It conducts
frequent test to analyze and ensure the quality of the chemicals used for the condom production
and also finished products.

Objectives:-

a) Development of new products

b) Development of new technologies
c) Absorption / adaptation / assimilation of new technologies

Functions:-

46
 a. Identification of alternative source for product chemicals both imported and indigenous is
being carried out.
b. Quality parameters of products at various levels of production are being checked.
c. Modification work of Bio-Gas plant.
d. Development of packing machines.
e. Modification of effluent treatment plant for further refinement of treated water.

4.17.6 SAFETY & SECURITY DEPARTMENT

The company integrates safety and environment protection as a policy along with the
production quality related activities.

The company has a well-established safety, occupation and environment policy that ensure safety
of public, employees, plant and equipment.

47
  The Peroorkada plant complies with all statutory rules and regulations basis.
 It imparts training to its employees as per the training calendar, carrying out statutory
safety audits of its facilities as per legal requirements.
 It conducts regular medical checkup of its employees and promoting eco-friendly
activities.
 It carry outs hazard identification and risk assessment.
 It takes various measures to avoid the fire hazard.
 Air pollution management
 Waste water management
 Solid waste management
 Forestation activities

5‘S’

Integrated Japanese concept for work place management by five steps of Housekeeping
viz. Organizing, neatness, cleaning, standardization and discipline. Each ‘S’ stands for:

 Seiri - Sort out

 Seiton - Set in Order
 Seiso - Shine
 Seiketsu - Standardize
 Shitsuke - Sustain

It is an important management philosophy towards high level of process, accuracy, dust

free atmosphere, proper maintenance, clean habits, understanding proper training, better
human relationship etc.

Functions of 5 ‘S’:

 A frame of mind
 Improves quality of human behavior
 Team work
 Starts with each individual practicing it
 For total employees involvement
 Reduces time for searching materials
 Marks area and cautions
 Keeps things in the best way
 Minimizes inventory
 Improves work place utilization
 For total quality environment
 A basic step towards total quality management

48
  Creates proper storage of hazardous material
 Gives proper care for emergency equipment’s
 Eliminates unsafe situation
 Organizes all cleaning aids
 Helps operator for doing autonomous maintenance
 Reduce wastages, defects and breakdowns
 Calls for regular inspection and feedback
 Assign roles and responsibilities
 Stepping stone for world class productivity

4.17.7 PRODUCTION DEPARTMENT

The production department processes and tracks all of the drawings for any given project
once they are released from the design department. HLL has today five state of the art
manufacturing facilities. HLL commenced its commercial operations on April 5, 1969 at
Peroorkada in Thiruvananthapuram in the state of Kerala. Together with the manufacturing
facility at Peroorkada, HLL today has five state of the art manufacturing facilities at:

a. Kanagala near Belgaum (1985) – for contraceptives and pharmaceutical products

b. Akkulam in Thiruvananthapuram (1994) – for hospital products
c. Kakkanad in the Cochin Special Economic Zone (2004) – for female condoms and male
condoms for export
d. Manesar in Gurgaon (2007) – for rapid in-vitro diagnostic test kits.

All these units have ISO 9001, ISO 14001 – quality and environmental management system
certifications.

The corporate vision of achieving the production department has a vision of “achieving a
target production of 1 billion pieces as a first step towards corporate vision”. HLL has recorded a

49
high productivity and profitability progressively over the years. It is because of the
implementation of very efficient and effective manufacturing process with the technical help
from Japan.

The production department is divided into two. They are:

 Primary Production
 Secondary Production

1. PRIMARY PRODUCTION

The manufacturing process of condoms in the primary production department can be

broadly classified into three main operations, viz.

a) Compounding

Compounding is done to make the latex suitable for molding operations and for making
the final product in conformity to requirements of the user. This is achieved by the addition of
fixed quantity of liquid compounding chemicals followed by compounding chemicals dispersion
to roll latex into mixtures. The dispersion is prepared by using ball mill/sound grinder/pearl
mill/attrite mill. After this the mixtures heated and then called for pre-vulcanization. Then the
pre-vulcanized compound is transferred to the molding section after the aging period.

b) Molding

In this section highly automated condom shaped moulds are mounded on dual line chain
and are by two motor.

 Mould washing
 Mould drying
 First dipping
 Drying
 Second dipping and drying
 Edge rolling (beading)
 Drying and vulcanization
 Dipping is swelling solution tank
 Dipping in anti-sticking solution
 Stripping

This cycle is continuous round the clock and fully automatic setup.

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 c) Vulcanizing

It is the process of cross-linking modules to make the material harder, less soluble and
durable. It is also called curing. Vulcanizing operations are done in automatic vulcanizing
machines in order to improve the physical properties of the products. The condoms from the
molding section are sent to the vulcanization machines. The condoms are vulcanized at the same
time the powered in these machines and are collected in crates. The production lots are
transferred to quality control half product without losing identity.

4.17.8 ENGINEERING DEPARTMENT

In HLL, Engineering department is responsible for the installation, proper maintenance
and upkeep of all factory structures and equipment’s and in maintaining the optimum of
condoms.
There are mainly four sections in engineering department, they are:
1. Mechanical section
2. Utility section
3. Instrumentation section
4. Electrical section

1) Mechanical Section:
Description:

JO: Junior Officer FM: Forman

M/S: Mechanical Shift

MM: Mechanical Maintenance

It plays a key role as a service section to keep the plant and machinery in satisfactory condition
according to the standards set by the management.

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Functions:-
 Mechanical maintenance of the plant & machinery
 Inspection of the all-incoming materials/spare/equipment’s.
 Modification, new installation, technology, up gradation and continual improvement of
equipment / machinery.

Objectiveness of Maintenance:
 Increase the productivity equipment’s.
 Decrease the overall cost of production
 Safeguard the equipment by minimizing the rate of deterioration of assets.

Types of Maintenance:-
Maintenance is subdivided into two main categories:

A. Preventive maintenance
B. Breakdown maintenance

A) Preventive Maintenance:-
Activities carried out to prevent failure or detect failures before it develops in to
breakdown. The preventive maintenance adopted in HLL includes lubrication, plant or over hauls
regular cleaning adjustment etc.

B) Breakdown Maintenance:-
Activities carried out to correct the failure or breakdown after the occurrence of
breakdown.

2) Utility Section:

Description:
JO : Junior Officer

FM : Forman

M/S : Mechanical Shift

MM : Mechanical Maintenance

Functions:

52
The main function of utility section is the maintenance of machinery which includes:
a) Chiller
b) Boiler
c) Compressor
d) Pipeline maintenance
A) Chiller
Chillers are used for cooling. There are five chillers in the organization. They are used
for process cooling and two are used for refrigeration. Process cooling means the cooling of
mould and condoms during production process. Refrigeration includes air conditioners and other
coolers like water coolers in the organization.
B) Boiler
Boilers are used for supplying steam to provide required temperature during drying
process. There are 3 boilers in total.
C) Compressor
Compressor is used to provide airflow for condom stripping. It is also used in
vulcanizing process. There are three compressors in the plant.

3) Instrumentation Section:
Description:
JO : Junior Officer

FM : Forman

M/S : Mechanical Shift

MM : Mechanical Maintenance

The instrumentation section consists of:

a) Electronic workshop
b) Calibration Lab
a) Electronic Workshop
It deals with motor and other electronic equipment’s.
b) Calibration Lab
The main function of calibration lab is the testing of equipment’s used in process
control such as ammeter, voltmeter and other sensitive instruments. Standard device is placed in

53
the lab and reading of devices during production process must match the reading of standard
device.

4.17.9 Electrical Section

This section plays a key role in the service section regarding the power receiving and
distribution system and to keep the plant and machinery in satisfactory condition according to the
standards set by the management.

Functions:

 Power receiving & distribution

 Preventive maintenance
 Breakdown maintenance
 Winding and over hauling of motors
 Inspection of incoming electrical materials
 On the job training to all electrical technicians

The task of maintenance is to keep production and testing machinery, service equipment’s,
building & grounds in good working condition with sufficient safety provisions.

54
4.17.10 PACKING DEPARTMENT
Naked condoms from Quality Control Finished Product are received batch wise and
scheme wise, foils, silicon oil, pouches wallet, cartons boxes etc.… after passing the incoming
inspection are received from store department. Naked condoms are issued to packing machine
for strip packing in foils as per packing schemes. Required quantity of silicon oil is closed in
strip as part of machine operation. Quality of silicon oil closed is as per customer’s standard.
Strips are packed in to pouches and wallets and then in to cartons & boxes as per customer
requirements.

The operations involved can be broadly classified into two categories:

1) Primary Packing Operations

2) Secondary Packing Operations

1) Primary Packing Operations

In primary operations, the major input to the process is tested and rolled condoms, which
are received, from QA department. Foils, lubrications, fragrances and flavors are the other major
department that the Primary packing operation involves. Strip packing of condoms using packing
machines i.e. tested and rolled condoms are packed as strips with lubricants / fragrances flavors
in aluminum foils.

2) Secondary Packing Operations

55
 In the SPO the major input to the process is strip packed condoms from the primary
packing section. Secondary packing materials such as pouches, wallets, cartons, leaflets and
boxes are received from stores department. After completion of secondary packing of a batch, the
quantity is offered to Quality Assurance department for FG (finished goods) inspection. The
Quality Assurance passed filled boxes will be transferred to depot section after box strapping
operations.

There are two types of packing:

1) Squeeze packing
2) Square packing

1) Squeeze Packing:-
Less lubrication oil is used to lubricate the condoms compare to square packing. This is
for domestic market and the expiry period is 3 years.
2) Square Packing:-
These condoms are more lubricated and more foil is used to pack. This is for international
markets and its expiry period is 5 years. The final product in cases manually and from there the
sales department will take for sales.

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4.17.11HUMAN RESOURCE DEPARTMENT
The main functions are:
 General Administration
 Wages and Salary
 Training and Development
 Performance Management
 Industrial Relations
 Labor Welfare
 Estate Management
 Implementation of official language

I. GENERAL ADMINISTRATION
a) Time Keeping
HLL is a company that works around the clock and has 3 shifts:

i. 06:00 am – 02:00 pm
ii. 02:00 pm – 10:00 pm
iii. 10:00 pm – 06:00 am
iv. General shift 09:15 am – 05:15 pm

Time office maintains all attendance records of employee. An unauthorized absence is

reported to appropriate section. It maintains records of any medical leave, compensatory leave,
overtime offs, breaks more than half hour, on duty leave etc. It gives sufficient attendance list,
which helps in wage calculation. Time offices use punching system for entry and exist of
workers. Late attendance up to 15 minutes the concerned department should five a written

57
consent to the employee because the punching system will cut off automatically after 15 minutes.
Punching 2 cards by the same person is prohibited. The late minutes are added up for one month
and are deducted from salary or wages, however 2 late purchases per month are allowed.

b) Employment Administration

 Maintaining details of agreed strength and actual strength

 Statistical data related to employees
 Sending report relating to the manpower
 Maintaining seniority list and roster position

c) Maintenance of Personal Records

HLL has got a prompt management information system, which feeds data every day,
LAN helps the MIS to update data of every department regularly, and this helps the management
to have a detailed data about personal records. MIS helps in knowing the demand and supply of
labor and in creation of manpower plan. Maintenance of such records helps the personal
department is new recruitment, promotions and internal transfer according to the need.

d) Contract Labor Management

 This includes registration and timely renewal of license

 Inviting tenders as per the requirement of the user department
 Certification of license, commencement / competition report
 Maintaining records & registration, annual returns as per contract labor Act

e) Administration of quality management system and OHSAS

f) Formulating HR policies and procedures

g) Issue office orders, notice and circulars

h) Administration of various schemes and agreement

II. WAGES AND SALARY ADMINISTRATION

 Pay fixation as per the long term settlement

 Annual increment
 Parity determination
 Gratuity and other retirement benefits

III.TRAINING AND DEVELOPMENT

58
 HLL follows continuous training programs for employees for their effectiveness. Training
helps to increase the knowledge and skill of an employee for doing a particular job. Training and
development in HLL is categorized into:

 Executive Development Program

 Supervisory Development Program
 Seniority
 Reservation list
 Performance appraisal
 Pay fixation and grade seniority list

PERFORMACE MANAGEMEN
 Performance evaluation is done annually for workers, supervisors and executive
separately.
 Factors affecting the key performance indicators of each job are identified and evaluated
as per the importance.
 Each factors has five descriptions
 The evaluator selects the best one that describes the factor of performance of each
employee
 The employees who get “excellent” rating on 2 continuous appraisals will be
recommended for the fast track promotion and also if an employee gets “very poor”
rating for two consecutive periods, he will be recommended for termination.

V. INDUSTRIAL RELATIONS

Industrial Relations (IR) as it is today all embracive and people involved. IR is also
integral part of social, political and economic conditions prevailing the scope of present day. IR
has widened and embraced functional interdependent complexities, involved not only matters to
wages and allowances, grades, promotions, transfer etc. People tend to respond differently in
different subjects even though issues are raised.

At HLL, employees are considered an asset and their value is appreciated through
continued improvement. Its philosophy itself as “to relieve and trust our employees”, so any
grievances are met with utmost importance and necessary actions are taken. HLL is domestic in
approach towards employee trade unions. A present HLL recognizes three employee trade
unions:

59
 1. HLL Life Care Ltd. Employees Union (CITU)

2. HLL Life Care Ltd. Workman Congress (INTUC)

3. HLL Life Care Ltd. Labor Union (AITUC)

All grievances handling procedures are handled through union only. Disciplinary
procedures are also taken in consultation with unions. Unions are also mediating bodies of
collective bargaining. Apart from there; union members do waste disposal, dispatch estate,
cleaning and maintenance duties.

VI. WELFARE SECTION

In the case of HLL Life care Ltd; they have offered many employees welfare schemes
that are provided to both salaried staffs and daily paid workers.

1. Provident Fund Scheme –

PF will be deducted from all the employees at 12% of basic wages i.e. basic pay and DA per
month.
2. HLL Welfare Fund –
For this scheme, Rs. 2 is collected from the wages and salaries of all the employees of the
organization.
3. HLL Workers Relief and Welfare Fund –
Rs 1 are collected from all the employees’ wages and salaries for this scheme.
4. Canteen –
Company provides canteen facilities to all employees. It is not fully subsidized. It provides
breakfast, lunch, dinner and break time tea at Rs 70 /- per day. Canteen is based on basis of
annual contract.
5. Safety of Employees –

 Fencing of Machinery:
All dangerous and moving parts of machinery are securely fenced. Screws, bolts and teeth
are completely encased to prevent danger.
 Work on or near Machinery in motion:
Only a specially trained adult male worker does lubrication or other adjusting operation on
the moving machinery.

60
  Employment of young Person on Dangerous Machines:
No young person is allowed working on any dangerous machine (so prescribed by the state
government) unless he is sufficiently trained or is working under the supervision of
knowledgeable person. 7.4 Device for Cutting off Power: Suitable device for cutting of power in
emergencies are provided.

6. Employee Insurance –
Employees are insured under the Employees State Insurance Scheme (ESI). ESI is a self-
financing social security and health insurance scheme for Indian workers. For all regular
employees earning less than Rs 15,000 /- per month salary, the employer contributes 4.75 % and
employee contributes 1.75 %, total share 6.5 %.

7. Recreation Club –
A recreation club for all employees provides all facilities for arts and sports. In every year,
there was an annual program. Program includes entertainment programs, athletics, parties etc.

Purpose of Trade Unions –

 Employment protection and job creation
 Economic protection
 Social Status and identity
 Democratic institution
 Transformation
 Sustainable development
 Greater bargaining power
 Minimize discrimination
 Sense of security
 Sense of participation
 Platform for self-expression
 Betterment of relationships

Specific Functions of Unions –

 Wages and salary bargaining
 Fight for continuous improvement in employee benefits
 Improving working conditions at work place
 Improving welfare, healthcare and recreation facilities as well as leisure at workplace
 Increasing rest periods, holidays, paid leave and time offs.

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VIII. ESTATE MANAGEMENT
The internal & external mails, office memos, registered mails etc. are received in this
section and corresponding entries are made in the dispatch register before sending them to the
concerned parties. The General maintenance of HLL also comes under this section.

 Modification and maintenance of company premises

 Housekeeping of all sections / departments
 Waste Management

IX. OFFICIAL LANGUAGE IMPLEMENTATION

HLL Life Care Ltd has an efficient security system for safeguarding & preventing
pilferage. The force has strength of more than 40. A superintendent of police is appointed as the
security & vigilance officer.

Being a central government undertaking HLL is committed to promote the national

language. The Hindi section under an assistant manager is responsible for this all orders and
records are translated in Hindi. The library is also functioning under the personnel department.

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4.17.12 SALES DEPARTMENT
Purpose: -
Execute the supply orders issued from Government of India, Ministry of Health & Family
Welfare and carryout execution of orders against domestic supply condoms as well as export
condoms as advised from the HLL’s marketing department.

Scope: -
In addition to the above main task, sales department arrange for the disposal of no
conforming products and sales of miscellaneous scraps like metal scrap. Foil waste, card board
waste, plastic waste, empty barrels etc. after complying necessary formalities with regard to the
scale of these items.

Responsibility: -
MGR (stores, sales) here in after referred as controlling officers of sales, senior assistant
manager under the guidance of the deputy manager is responsible for the implementation of this
procedure. The orders are placed in the following details.

 Orders Number and Date

 A/C no and Date
 Item Distribution
 Quality order
 Unit
 Rate per Unit
 Total cost price
 Address of consignee
 Date of delivery to each consignee
 Details of inspecting authority
 Terms of delivery
 Mode of delivery

4.17.13 STORES DEPARTMENT

63
HLL consists of 5 sections:
1) Receipt store

2) Chemical & packing material store

3) Engineering store

4) Stationary store

5) Finished goods store

1) Receipt Store
All purchased goods arrive at the receipt store. Inward register book is maintained and
MAN (Material Arrival Note) is issued. Then the testing department issues MRR (Material
Receipt Report) if the goods are accepted of MRN (Material Rejection Note) if materials are
rejected.

2) Chemical Store
Here the latex, chemical and packing materials are stored.

3) Engineering Store
All engineering goods are stored here.

4) Stationary Store
The stationary goods are stored here. All those stores are computerized and issue material
on receipt of intent or material requisition from used department. The store is based FIFO system
i.e. first in first out. The items that are coming first are to be dispatched first. ABC analysis is
used in the store.

5) Finished Goods Store

Finished goods are stored in the department as custodian or finished goods.

4.17.14 PURCHASE DEPARTMENT

64
Objectives
The objective is to ensure that materials and services are made available to have
uninterrupted production and packing as per plan.

Purchase department is called up on to purchase the right type of goods at the right time,
from the right suppliers and at the right price. The machineries, tools, raw-materials, packing
material, sanitary items etc.. which is required for the operation in the factory are brought by the
purchase department as and what required. Therefore the deputy manager has to deal with the
procurement of raw materials, packing materials etc.

Purpose:

To give introduction and describe the objective with regards to the functions of purchase
department.

There are two tenders:

1. Open Tenders

2. Limited Tenders

1) Open Tenders: -
Value is exceeding 30 lakhs in the case of consumable and recording expenditure and
value exceeding Rs 50 lakh in case of capital goods / works. Tenders are floated in reading
newspaper / website. The purchase function includes:-

a) Source Identification

b) Source Selection

Source identification involves the identification of suppliers looking into past experience,
trade journals etc.

Source selection is determined by obtaining the desired quality price and service.

The other functions are:

65
 i. Maintain continuity in respect of supply of materials to support the production schedule
and the co-operations.
ii. Doing the above with the minimum investment consistent with the economic advantage.
iii. Avoiding duplication wastage and obsolescence with respect to materials.
iv. Developing goods and reliable relationship with the suppliers.
v. Procuring material at the lowest cost consistent with the quality.
vi. Maintaining standards in quality of materials based on suitability for use.

2) Limited Tenders:
Limited Tenders are floated in the following cases:-

i) For consumable items whose total value is less than Rs.3000000/-

ii) Capital goods/work contracts whose value is below Rs.5000000/-. Limited
tenders have only price bid.

Suppliers Rating
Done based on the following:-
1. Quality of the product
2. Functional performance
3. Adherence to delivery schedule

4.17.15 INFORMATION TECHNOLOGY DEPARTMENT

66
This department provides the resulting service and support for hardware, networking and
security services required for the company. The support includes the development/ maintenance
of various software services like EIMS, Intranet site mailing service, Website etc. The EIMS is a
software application developed for the organization having modules for production, purchase,
store, sales, marketing, finance and engineering.

Software support includes development/maintenance of various software applications like:-

1) INTERNET
2) MAILING SERVICE (WAN)
3) COMPANY WEBSITE
4) EIMS (Enhanced Integrated Management Information System)
1) INTERNET
It is the network connection between the entire computer of the Peroorkada factory for
data and resource sharing.

2) MAILING SERVICE
The WAN (Wide Area Network) is the network of all computer of Hindustan Latex
Limited (HLL) worldwide. Internet connection is provided from BSNL.

3) COMPANY WEBSITE
The company website opened in 2000 (www.hindlatex.com)

4) EIMIS (Enhanced Integrated Management Information System)

EIMIS has developed in 1997. It makes the daily operations smooth and fast. It certain
records of attendance, employee salary, leave details etc.

EMIS is customized application with ORACLE database. 10G form EIMIS maintains all
the data for functioning of production on QC. Finance ETD, Store, purchase etc. Internet
connects the networks with in the organization. The WAN (Wide Area Network) connects all the
function and officers of HLL across the world. Company website provides in information about
the organization for the public. Operating system Linux is used in HLL. It is graphical user
interface.

67
 For communication purpose HLL is suing IP (Internet Protocol) phones and messaging
purpose IP messenger is used.

5. DATA ANALYSIS AND INTERPRETATION

5.1 RATIO ANALYSIS

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5.1.1 INVENTORY TURNOVER RATIO
Meaning
Inventory turnover ratio is one of the accounting turnover ratios, a financial ratio. This
ratio measures the number of times, in average, is sold during the period. A popular variant of the
inventory turnover ratio is to convert it into an average day to sell the inventory in terms of days
Remember that the inventory turnover ratio is figured as “turnover times” and the average days
to sell the inventory is in days.

Formula

Inventory Turnover ratio = Cost of goods sold / Average inventory

Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

TABLE 5.1.1
INVENTORY TURNOVER RATIO

COST OF GOODS AVERAGE INVENTORY

YEARS SOLD INVENTORY TURN OVER
RATIO

2012 – 2013 19,036.76 4283.69 4.44

2013 – 2014 19,399.17 4552.05 4.27

2014 – 2015 20,585.08 6371.69 3.23

2015 – 2016 24,613.20 4802.29 5.12

2016 – 2017 25,808.01 6081.32 4.24

CHART 5.1.1
INVENTORY TURNOVER RATIO

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INTERPRETATION
The chart given above shows the increasing trend in inventory turnover ratio indicates
the efficiency of the firm to manage its inventory. A high turnover ratio indicates that the
inventory is sold fast. A low turnover ratio reflects over investment in inventories and
accumulation of huge stock. Inventory turnover ratio is highest in the year 2015-16 with nearly
to 3.23 and lowest turnover in 2014-15.

5.1.2 INVENTORY CONVERSION PERIOD

70
Meaning
Inventory turnover ratio or stock turnover ratio can be related to time. The ratio can be
expressed in terms of days or months.
Formula
Inventory conversion period = No of days
Inventory turnover ratio
No of days in a year = 365
Average inventory = Opening stock + Closing stock
2

TABLE 5.1.2
INVENTORY CONVERSION PERIOD

INVENTORY INVENTORY
YEARS NO.OF DAYS IN TURNOVER CONVERSION
YEAR RATIO PERIOD

2012 – 2013 365 4.44 82.20

2013 – 2014 365 4.27 85.48

2014 – 2015 365 3.23 113.00

2015 – 2016 365 5.12 71.29

2016 – 2017 365 4.24 86.08

CHART 5.1.2

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 INVENTORY CONVERSION PERIOD

INTERPRETATION
From the above chart, we can interpret that there is a fluctuating trend in the inventory
turnover ratio. So the inventory turnover period is showing up and down trend. The inventory
turnover period is 82.2 days from 2012-13 and the number of days decreased to 85.48 in the year
of 2013-14, then decreased to 113 days in 2014-15, again increased to 71.29 days in the year of
2015-16, inventory turnover period is the lowest of 86.08 days in 2016-17.

5.1.3 TOTAL ASSETS TURNOVER RATIO

Meaning

72
 Inventory as percentage of total assets show that how much inventory is included in the
total asset.
Formula
Total assets turnover ratio = Net Sales / Average Total Asset
Net sales = Annual Sales in a Year
Average Total assets = Assets at total of current year+
Assets at end of the preceding year
2

TABLE 5.1.3
TOTAL ASSETS TURNOVER RATIO

YEAR NET SALES TOTAL ASSETS TOTAL ASSETS

TURNOVER RATIO

2012 – 2013 64,005.19 85,811.04 0.74

2013 – 2014 68,404.21 92345.68 0.74

2014 – 2015 80,904.73 1,12,411.85 0.72

2015 – 2016 85,742.91 1,13,127.84 0.76

2016 – 2017 91564.73 1,17,136.99 0.78

CHART 5.1.3
TOTAL ASSETS TURNOVER RATIO

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INTERPRETATION
The above chart gives the relationship of sales with fixed assets. The ratio is fluctuating
which shows that the fluctuation in the sales make the changes in the ratio of total assets. The
total assets turnover ratio 0.78 is in 2016-17 which is decreased to the highest of 0.74 in 2012-13
and 2013 – 2014 decreased to the lowest of 0.76 in 2015-16. It contains the company`s total
assets in the particular year.

5.1.4 CAPITAL TURNOVER RATIO

Meaning

74
 Capital ratio measure the effective utilization of working capital. It also measures the
smooth running of business or otherwise the ratio establishes relationship between cost of sales
and capital turnover.

Formula

Capital Turnover Ratio = Sales / Capital Employed

Sales = Annual Sales

Capital Employed = Total Assets-Current Liabilities

TABLE 5.1.4

CAPITAL TURNOVER RATIO

YEAR SALES CAPITAL CAPITAL TURNOVER

EMPLOYED RATIO
(Rs)

2012 – 2013 64,005.19 2980.34 21.47

2013 – 2014 68,404.21 3274.61 20.88

2014 – 2015 80,904.73 1844.55 43.86

2015 – 2016 85,742.91 1847.94 46.39

2016 – 2017 91564.73 4090.31 22.38

CHART 5.1.4

CAPITAL TURNOVER RATIO

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INTERPRETATION

The charts shows the increase in capital turnover throughout the year in 2015-16. The
increase in capital turnover denotes that company is earning more through sales. The chart shows
the fluctuating trend in the capital turnover ratio. It increases the sales of the company in 2015 -
16.

5.1.5 SALES TO FIXED ASSETS RATIO

Meaning

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 This ratio measures the efficiency of the assets use. The efficient use of assets will
generate sales per rupee invested in all the assets of a concern. The inefficient use of the assets
will result in low sales volume with higher overhead charges and underutilization of the available
capacity.

Formula
Fixed assets turnover ratio = Sales

Average Fixed Assets

Sales = Annual Sales

Average Fixed assets = Fixed Assets of Current Year +Fixed Assets of Previous Year

TABLE 5.1.5

SALES TO FIXED ASSETS RATIO

YEAR SALES AVERAGE FIXED FIXED ASSETS

(Rs) ASSETS TURNOVER
RATIO

2012 – 2013 64,005.19 30,084.48 2.91

2013 – 2014 68,404.21 36,642.61 2.66

2014 – 2015 80,904.73 43,735.28 2.62

2015 – 2016 85,742.91 48,409.57 2.60

2016 – 2017 91564.73 49,331.10 2,79

CHART 5.1.5

SALES TO FIXED ASSETS RATIO

77
INTERPRETATION

The chart given above interprets the sales to fixed asset ratio. The ratio is 2.91 in 2012 -
2013 which is higher ratio is indicative of greater efficiency in managing fixed assets and
investments. The ratio is 2.49 in 2016 - 2017 which is the lowest of all that shows inefficient
utilization of fixed assets. Purchasing decisions are made based on this ratio which will improve
the efficiency of the firm.

5.1.6 RAW MATERIALS INVENTORY TURNOVER RATIO

Meaning

78
 The average amount of raw materials to be kept in stock will depend upon the quantity of
raw materials required for particular period and the average time taken in obtaining a fresh
delivery. Suitable adjustments may have to be made to provide for contingencies and seasonal
factors.

Formula

Raw Materials Inventory Turnover Ratio = Raw Materials Consumed

Average Raw Material Inventory

Raw Materials Consumed = Opening stock of RM + Purchase of RM – Closing stock of RM

TABLE 5.1.6

RAW MATERIAL INVENTORY TURNOVER RATIO

YEAR RAW AVERAGE RAW RAW MATERIALS

MATERIALS MATERIAL INVENTORY
CONSUMED INVENTORY TURNOVER RATIO

2012 – 2013 19,036.76 4283.69 4.44

2013 – 2014 19,399.17 4552.05 4.26

2014 – 2015 20,585.80 6371.69 3.23

2015 – 2016 23,180.02 4802.29 4.83

2016 – 2017 25,808.01 6081.32 4.24

CHART 5.1.6

MATERIAL INVENTORY TURNOVER RATIO

79
INTERPRETATION

The above chart shows the Raw material inventory turnover ratio is higher in 2015-16.
The ratio is the lowest in 2014-15 compared to all the years. The similar ratio is maintained all
the year with slight variations; it will be useful the make the buying decision to maintain the
inventory in the company.

5.1.7 MATERIALS TO SALES RATIO

80
Meaning

Materials to sales ratio is one of the operating cost ratios which are used by production
mangers to monitor trend and identify the problems. The problems can be identified with the
help of the change in the ratios. It is necessary to control the material cost to reduce the cost of
goods sold.

Formula

Materials to Sales Ratio = Direct Material Cost / Net sales x 100

TABLE 5.1.7

MATERIALS TO SALES RATIO

YEAR DIRECT NET SALES MATERIALS TO

MATERIALS SALES RATIO

2012 – 2013 19,036.76 64,005.19 29.74

2013 – 2014 19,399.17 68,404.21 28.36

2014 – 2015 20,585.80 80,904.73 25.44

2015 – 2016 23,180.02 85,742.91 27.03

2016 – 2017 25,808.01 91564.73 28.18

CHART 5.1.7

MATERIALS TO SALES RATIO

81
INTERPRETATION

From the above chart we can interpret that the materials to sales ratio is 29.74 that is
higher in 2012 - 13. The ratio is 25.44 that is the lowest in 2014-15 compared to all the years.
The ratio is in increasing trend.

5.2 TREND ANALYSIS

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Trend analysis involves the collection of information from multiple time periods and plotting the
information on a horizontal line for further review. The intent of this analysis is to spot
actionable patterns in the presented information

5.2.1 TREND ON INVENTORY

TABLE 5.2.1

TREND ON INVENTORY

YEAR INVENTORY TREND INDICES

(RS) %

4283.69 100
2012 – 2013

4552.05 106.26
2013 – 2014

6371.69 148.73
2014 – 2015

4802.29 112.09
2015 – 2016

6081.32 141.94
2016 – 2017

CHART 5.2.1

TREND ON INVENTORY

83
INTERPRETATION

The table given above interprets the inventory trend of the organization. The inventory
of the organization increased to 106.26% from the base level of 100% in 2012-13, the inventory
percentage is increased to 148.73% in 2014-15, and it is further decreased to 112.09% in 2015-
16, the inventory level increase to 141.94% in 2016-17.

5.2.2 TREND ON NET SALES

TABLE 5.2.2

84
 TREND ON NET SALES

YEAR NET SALES TREND INDICES

(RS) %

2012 – 2013 64,005.19 100

2013 – 2014 68,404.21 106.88

2014 – 2015 80,904.73 126.41

2015 – 2016 85,742.91 133.97

2016 – 2017 91564.73 143.06

CHART 5.2.2

TREND ON NET SALES

85
INTERPRETATION

The table given above interprets the trend on net sales of the organization. The net sales
of the organization increased to 106.88% from the base level of 100% in 2012-13, the net sales
percentage is further increased to 126.41% in 2014-15, and it is increased to 133.97% in 2015-
16, the inventory level increased to 143.06% in 2016-17. The trend on net sales is not stable
which should be stabilized for the steady growth.

6. FINDINGS / SUGGESTIONS AND CONCLUSION

6.1 FINDINGS

86
 This company inventory turnover ratio has decreased as compared with previous years.

 The number of days taken for convert the inventory into sales is more .

 The total asset turnover ratio of the organization is good which shows the efficiency of
the firm.

 This company capital turnover ratio is earning more from sales.

 This company does not utilize their fixed asset effectively.

 The Raw material inventory turnover ratio is in fluctuating trend.

 The trend on inventory shows on increasing trend in the year 2014 – 2015 is 148.73%

 The trend in net sales of the company is continuously increased which is for the firm.

6.2 SUGGESTIONS
 This company should increase the inventory turnover ratio.

87
  This company should reduce the inventory conversion period.

 This company should following the existing total asset turnover ratio.

 This company maintaining existing capital turnover ratio.

 This company should make the buying decisions to maintain the inventory level.

 This company should utilize their fixed assets effectively.

 This company should maintain trend on inventory which is followed current scenario.

 This company should maintain net sales on inventory which is followed current scenario.

6.3 CONCLUSION
HLL has come from a long way since inception and through diversification, has
developed enviable manufacturing infrastructure, by virtue of which the company has come a

88
leading manufacturer of health care products and control devices. It has recorded consistently
excellent working results. High productivity and good work atmosphere have also led to the
reduction of rejections and wastage at different levels of production. Therefore the company
seems to have prosperity in the future.

The project study is about “Effectiveness of Total Quality Management in HLL

Peroorkada Plant, Trivandrum”. The study was conducted for 62 days. HLL Life care Limited is
the only company in the world manufacturing and marketing widest range of contraceptives. It is
unique in providing a range of condoms, including female condoms, Intra Uterine Devices, Oral
Contraceptive Pills-Steroidal, non-steroidal and emergency contraceptive pills; and Tubal Rings.
HLL today process 1.316 billion condoms making it one of the world’s leading manufacturer of
condoms, accounting for nearly 10% of the global production capacity.

Quality system is one of the most important departments of every organization because
the process of quality management is in a cyclic manner. The main benefits of a solid quality
system are greater teamwork, reduction in defects, reduction of waste of raw materials,
maximum productivity, employee awareness and efficiency also to reduce the cost and provide
quality products at reasonable price to the consumers.

At last this project helped to understand the relationship between various factors that are
associated to quality management in the organization. To conclude, HLL is truly on its way to
achieve greater heights along with releasing its motto “Innovating for Health generation” by
giving importance to their quality management system.

BIBILOGRAPHY
BOOKS
1. C.R Kothari, “Research Methodology - Methods and Technique’s”, Second Edition.
89
 2. Buffa, E.S. And Miller J.G., Production-Inventory System: Planning And control, 3rd
edition Homewood, Ill., Richard Irwin, Inc., 1979.

3. Pandey, “Financial Management”, Vikas Publishing Pvt Ltd.

4. Dr.B.G.Satyaprasad, Dr.P.V.Kulkarni. “Financial Management”, 13th Revised Edition.2011

5. Mr.K.Shridhara Bhat, “Inventory Management”. 1st Year of Publication.

ANNUAL REPORT

1. HLL LIFECARE ltd Annual Report (2012-13)

2. HLL LIFECARE ltd Annual Report (2013-14)

3. HLL LIFECARE ltd Annual Report (2014-15)

4. HLL LIFECARE ltd Annual Report (2015-16)

5. HLL LIFECARE ltd Annual Report (2016-17)

Online Sources

 http://www.lifecarehll.com
 http://www.wikipedia.com
 http://www.google.com

BALANCE SHEET OF HLL LIFECARE LIMITED, PEROORKADA

THIRUVANANTHAPURAM

Liabilities 2012 – 2013 2013 – 2014 2014 – 2015

90
Shareholders’ funds
(a)Sharecapital 19,353.50 19,353.50 19,353.50
(b) Reserves and surplus 18,468.10 20,586.01 23,275.32
Share application money pending
allotment - - 4000
Non-current liabilities
(a) Long-term borrowings 5,265.49 7,722.38 5,153.60
(b) Deferred tax liabilities 968.84 1,263.47 1,198.20
(c) long term provisions - - -
Current liabilities
(a) Short-term borrowings 23,460.38 33,766.91 37,657.56
(b)Trade payables 9,276.92 10,281.87 20,959.49
(c) Other current liabilities 25,829.98 17,963.19 23,316.53
(d) Short-term provisions 2,305.61 1,395.57 1,429.30
Advances received for project held under
trust as per contra 50,466.87 71,015.72 73,723.93
Total 1,55,395.69 1,83,348.62 2,10,189.10

Assets 2012 – 2013 2013 – 2014 2014 – 2015

Non-current assets
(a) Fixed assets
(i) Tangible assets 16,723.51 17,844.57 22,620.96
(ii) Intangible assets 740.10 819.06 828.29
(iii) Capital work-in-progress 4,494.56 6,999.90 7,454.27
(b) Non-current Investments 18,586.42 19,420.17 19,425.17
(c) Other Non – current assets 531.00 567.05 4,628.15
Current Assets
a) Inventories 10,492.67 11,704.73 10,117.97
b) Trade receivables
41,481.83 43,148.25 62,261.05
c) Cash and cash equivalents
d) Short -terms loans and advances 1,172.88 1,452.80 1,333.77
e) Other current assets
8,550.55 9,991.92 7,621.85
2,155.30 384.45 533.69

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Cash and bank balances of projects held
under trust as per contra
50,466.87 71,015.72 73,723.93
Total 1,55,395.69 1,83,348.62 2,10,189.10

BALANCE SHEET OF HLL LIFECARE LIMITED, PEROORKADA

THIRUVANANTHAPURAM

Liabilities 2015 – 2016 2016 – 2017

Shareholders’ funds
(a)Sharecapital 29,041.50 29,041.50
(b) Reserves and surplus 25,697.70 -
Other equity - 21,646.01
Equity attributable to - 50,687.51
owners of the entity - 359.67
Non - controlling interests - -
Share application money
pending allotment
Non-current liabilities 4,095.11 22,964.43
(a)Long-term borrowings 1,165.59 -
(b) Deferred tax liabilities 121.78 89.37
(c) long term provision - 1,446.75
Other non - current
liabilities
Current liabilities 44,378.06 39,253.14
Financial liabilities 19,219.08 30,622.11
(a) Short-term borrowings 17,181.35 24,811.17
(b)Trade payables 1,239.48 1,712.75
(c) Other current liabilities
(d) Short-term provisions 96,764.50 1,30,354.14
Advances received for

92
project held under trust as
per contra
Total 2,38,904.15 3,02,301.03
Assets 2015 – 2016 2016 – 2017
Non-current assets
Property, and plant - 25,350.63
equipment’s
Good will - 601.93
Intangible assets under
development - 1,605.83
Other intangible assets - 770.39
(a) Fixed assets
(i) Tangible assets 23,540.73 -
(ii) Intangible assets 696.86 770.39
(iii) Capital work-in- 8,720.22 49,790.06
progress
(b) Non-current Investments 28,204.75 -
(c) Other Non – current
assets 307.06 1,602.42
(d) long – term loans and 500.00 -
advances
Financial investments
(i)Investments
Accounted under equity
method - 69.54
Other investments - 2.25
(ii)Others - 3,045.93
Deferred tax assets - 710.15
Current Assets
a) Inventories 9,740.60 16,399.99
b) Trade receivables
60,264.61 57,796.30
c) Cash and cash
equivalents

93
 d) Short –terms loans 2,211.79 4,944.73
and advances
(e) Other current assets
6,742.78 -
(f) current investments
301.83 1,238.06
Bank balance other than(i)
908.42 -
above
Assets classified as hold for
- 626.38
sale
Others
- 13.46
Cash and bank balances of
- 7638.84
projects held under trust as
per contra

96,764.50 1,30,354.14
Total 2,38,904.15 3,02,301.03

94