ici project.docx

7/28/2019 ICI project.docx

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Everything you could imagine

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TOTAL QUALITY MANAGEMENT

FINAL PROJECT

SUBMITTED TO:

DR.NAWAR KHAN

SUBMITTED BY:

SAADAT ULLAH (01-120092-050)OMER SALIM TIPU


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DEDICATION

Dedicated to our beloved parents and to all those,whose prayers always pave the way to success for us.


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ACKNOWLEDGEMENTFirst of all we would like to thanks a millions to Almighty ALLAH, whose

blessing endowed us to complete this project timely and successfully. We

would also like to pay tribute to the Holy Prophet Muhammad S.A.W

(Peace be upon him), whose life is perfect model for whole humanity. We

owe this success to our parents, who are real source of encouragement

forever.

Thanks to Almighty Allah for giving us knowledge, power and strength to

accomplish this task. We learned a lot while doing this project and this

will certainly help us in our forth coming life. Many friends of us helped

us during this project but we are really thankful to the help and support

of Dr. Nawar khan from the Institute of management sciences, who

helped us in all the phases of this project. His supervision helped us a lot

during the times of difficulties. In the end we would like to thank all of

our friends for their support and encouragement.


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THE GROUP IN BRIEF

The ICI Group is one of the largest specialty products, coatings and

materials companies. ICI has over 50,000 products more than 200

manufacturing sites and offices in over 55 countries; some 59,000 employees

worldwide. ICI has leading international positions in industrial adhesives,

specialty starches, electronic and engineering materials, fragrances, flavors,

food ingredients, specialty agrochemicals, catalysts, synthetic lubricant base

stocks and formulations, personal care ingredients, paints, acrylics,

polyurethane chemical and systems based on MDI (diphenylmethane

diisocyanate), ozone benign refrigerants and titanium dioxide pigments.

STRUCTURE

ICI BOARD

The ICI Board consists of the Chairman, five Executive Directors and five

Non-executive Directors. The Board is responsible for determining the

direction and board policies of the Group consistent with the objective of

being the industry leader in creating value for customers and shareholders.

EXECUTIVE MANAGEMENT TEAM

The management of ICI is through an Executive Management team headed

by the Chief Executive and comprising the Vice Chairman, Chief Operating

Officer, Chief Financial Officer, five Executive Vice Presidents, the Senior

Vice President of Human Resources and the General Counsel.


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INTERNATIONAL BUSINESS

An Executive Vice President or a Chief Executive Officer heads ICIs

International Businesses. Each is responsible for the financial performanceof their business under the strategic general guidance of the Executive

Management Team.

VISION

Today's ICI is about winning - winning to achieve the vision of becoming

the industry leader in creating value for customers and shareholders and to

become the most admired specialty products, paints and materials company

in the world.

ICI aims to achieve this through:

Market-driven innovation in products and services.Winning in quality growth markets worldwide ICI will invest in growth markets in which it has leading market

positions.

ICI's aim is to have all its businesses in such positions and it will do thisby concentrating efforts on the best quality opportunities around the

globe.

Inspiration and reward of talented peopleICI is determined to create a way of working that releases the energy and

talents of everyone in the Group.

Exemplary performance in safety and health.ICI's goal is to have an exemplary performance in safety and health and

become the world leader.

Responsible care for the environment. Relentless pursuit of operational


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excellence

HISTORYICI was formed on December 7, 1926, by the merger of four of the largest

chemical companies in the UK. Its purpose was to create a British company

capable of competing in world markets with large corporations in America

and in Germany. The four companies merged were Brunner, Mond &

Company Limited, Nobel Industries Limited, British Dyestuffs Corporation

Limited and United Alkali Company Limited.

The plan for the new company was agreed on board the Cunard Line vessel,

Aquitania, on a voyage from New York to Southampton. The architects of

the merger were Sir Harry McGowan, Chief Executive of Nobel Industries,

and Sir Alfred Mond, later Lord Melchett, the Chairman of Brunner, Mond

& Company, who became the first ICI Chairman.

With 33,000 employees, ICI's main products included chemicals, explosives

and accessories, fertilizers, insecticides, dyestuffs, domestic chemicals,

leather cloth, printing, sporting ammunition and paints. In its first year of

business, ICI sold GBP 27 million worth of these products and made a pre-

tax profit of GBP 4.5 million.

Throughout its history, ICI has been at the forefront of scientific discovery

and developing inventions for the marketplace with products such as

fertilizers, plastics, manmade fibres, anaesthetics, heart drugs, herbicides,

pesticides, commercial explosives, waterborne paints, reactive dyes and


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biodegradable plastics.

In 1993, ICI demerged its bioscience businesses of pharmaceuticals,agrochemicals, specialities, seeds and biological products into a separate,

publicly listed company, Zeneca Group PLC.

ICI has always emphasized research and innovation and is continually

engaged in development programs. The Group relies on 4,000 research,

technology and engineering specialists to maintain a strong technical base

and ensure competitive advantage through the development of new or

improved products and processes.

The ICI Group today is one of the largest chemical companies in the world,

with international strengths in the areas of paints, materials, explosives and

industrial chemicals. ICI operates its main businesses on an international

basis. In addition, regional businesses located in Pakistan, India, Argentina

etc. reinforce the Group's worldwide competitive strengths.

ICI IN PAKISTAN


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ICI in Pakistan, a leader in industrial chemicals and paints, manufactures and

sells a diversified range of products. The Company's vision is to be the

industry leader in creating value for customers, shareholders, suppliers andemployees.

ICI in Pakistan has played an active role in the Country's industrial

development and progress, for well over half a century, and continues to do

so, with investment in the future.

OUR

BUSINESSES?

AGROCHEMICAL

&

SEEDS

PAINTS

POLYESTER

SODAASH

PHARMACEUTICALS

CHEMICALSPURE

TEREPHTHALIC


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ICI Pakistan Limited's predecessors have been operating in the country well

before independence. Its first manufacturing plant for Soda Ash in Khewra

was established over fifty years ago. Since then, it has progressively movedto produce a diversified range of products including decorative, refinish and

industrial paints, polyester fibre, sodium bicarbonate, agrochemicals,

specialty chemicals and pure terephthalic acid. The Company also markets

toll manufactured, pharmaceuticals and animal health products, in addition

to a range of imported industrial chemicals and seeds.

In June 1998 ICI Pakistan's latest investment in a USD 490 m plant to

annually produce 400,000 tonnes of Pure Terephthalic Acid (PTA) was

commissioned. This is ICI Pakistan's largest single investment to-date. With

annual sales of over Rs 11 billion in 1998 and a sustained record of financial

viability, the Company continues to add value for its shareholders.

ICI in Pakistan is investing in the future, in order to respond to and meet

the challenges of the coming century. By developing an ability to compete

internationally, focusing sharply on customer needs and having a culture of

continuous improvement, ICI Pakistan plans to achieve its vision of

enhancing value for the shareholders and the customers, also meet the

challenging targets it has set for the Company's safety, health and

environmental performance by the year 2000.

Mission Statement


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The ICI paints team intends to remain market leaders in the Paints

Business.We wish to be recognized for offering the best products & excellent

customer services. We will run a high quality, profitable and growth oriented

business in an exciting and safe environment.

Introduction of Paint Industry

Paint

A chemical oriented liquid used to protect and decorate different kind of

surfaces

Paint industry is divided into sectors:

1. Organized Sector

2. Mushroom Sector

Organized Sector

It includes the companies listed in Stock Exchange or the firms registered,

having planned promotional activities with relatively high prices. They fall

under the capacity tax system and distribute in more the one province.

Mushroom Sector

It includes the unregistered firms, having city based distribution with

seasonal brands, having lower prices with no planned promotional activities.

They fall under fixed tax system.


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Companies listed in stock exchange are:

ICI Dulux

Berger Paints Pakistan Ltd. Buxly Pains Kausar Paints.

Competitors of ICI

Berger Master paints Mushroom industry Baxley paints

ICI DULUX------ THE MARKET LEADERS

ICI Dulux is the market leader not only w.r.t the quality but also with

respect to turnover. ICI has an edge over it competitors due to its

diversified fields. It is known throughout the world and has good name in

other sectors as well, which has given the advantage to Dulux in paints.

As far as the government is concerned, ICI Dulux is paying all its taxes

properly and so it is not being bothered different government policies.


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PRODUCTION

Product Lines

ICI has diversified product lines like:

Paints Polyester Staple fiber Soda ash Specialty chemicals Medicines

Market share of different Product line in Pakistan:

Paints 70%

Soda ash 80%

Polyester 25%

Medicines 45%


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Product range (Paints Business)

ICI Dulux is producing both WATER BASED paints as well as OIL

BASED paints.

Water Base Paints

Dulux Pentalite Special Plastic Emulsion (Washable, for masonrysurfacestone structure)

Dulux Pentalite Natural Whites (for sensitive people from smell,washable with smooth and durable finish

Dulux Weather Shield (protective paints against extreme weather) Paintex Plus Emulsion ( for price sensitive people) Maxilite (Economical , quality distemper)

Solvent Base Paints

Dulux systhetic Enamel (for wood & metal surfaces) Dulux Pearl Glo (for all surface) Dulux Prime ON (perfect base for emulsion coating) Dulux Red Oxide And Zinc Primer ( to protect metal rust) Dulux Water Repellent (prevents from water and fungal attacks) Dulux Aluminum (for resisting high heat)


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Production Process (Paints)

Dispersion Section

In this stage raw materials (Pigment, Resin & Solvent additives) are issued

from the material control department to production department according

to the requirement. In production department raw material are first sent todispersion section where Wall Mixer Machine is used to mix all the

ingredients. Once the ingredients are mixed then they are sent to various

Grinding Mill Base Machines (Sand Mill, Basket Mill, Bead Mill). These

mills process and grind ingredients for smoothness and dispersion. Here

the Gage plate (0-50 microns) is used to check to smoothness/dispersion. In

this section mixture is thicker.

Mixing Section

In this section, adding more Resin & Solvent, Additives does further mixing

process to reduce thickness of the mixture. Resin is added to increase the

quality, volume and for further smoothness. Other chemicals are also used

to kill the germs and to create fragrance.

Color Match & Quality Control Section

In this section, special chemicals called Tinters are to add color to the


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mixture according the requirement of customers. After adding the color

then the quality is checked in the Quality control laboratory where the

followings things are checked:

ColorViscosity (thickness)Weight per liter Glass (shinning) Drying

In color checking, the company has set predetermined color standards

(according to the customer demand) and stable product color is matched

according to the standards. If there is variation then more or less tinters are

used to make it according to the standards.

Filling Section

After matching the colors, the finished product is sent to the Filling Section

where Fix Mixers are used to fill the tins/containers according to their

capacity. Ink Jet Machine is used to print the manufacturing date, expiry

date, product price, sales tax, color, quantity/volume and product codes.

After filling the containers, weight is measured on the computerized scale.

Now the paints are filled in plastic containers for the customer benefits.

LOCATION

The location of businesss facilities has a significant impact on companys

operating cost, the price it charges, and its ability to compete in the market.


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ICI started operation in Pakistan 1964, its manufacturing plant for paints

Business situated at 346 Ferozepur Road, Lahore.

Corporate offices

Lahore Islamabad Peshawar Hyderabad Faisalabad Multan

Regional Offices

Rahim Yar KhanVehari Quotta Sahiwal Gujranwala

Warehouses

Karachi Multan Hydraabad Islamabad

FACTORS AFFECTING LOCATION SELECTION

Following are a few of the factors that can affect the decision of location


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selection:

Proximity to markets.

State & local Government policies. Labor cost. Labor availability. Utilities, taxes & real estate costs.Transport available. Quality of life. Community attitude. Expansion potential etc.

Capacity

It is the maximum rate of output for a facility that even achieved.

NO. OF PLANT AND THEIR CAPACITY

ICI has one plant for paints manufacturing located at Lahore. The total

capacity of this plant is 18 million liters per year

UTILIZATION

Maximum Total capacity = 18 million liters per year

Actual production = 14 million liters per year

Normally they are using two shifts per day.

Utilization ( %) = actual capacity/max capacity = 77.77%

Capacity cushion= 100%-77.77% = 22.23%

FORECASTING

It is a prediction of future events used for planning purposes. ICI uses


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following approaches in forecasting.

APPROACHES TOWARDS FORECASTINGForecasting is a function of demand, and three approaches are normally

available for making the forecast of future demand as:

(A)QUALITATIVE APPROACH

This approach incorporates important factors like decision makers

emotions, experience, judgment, etc.

It includes:

Executive opinion Sales force forecast Consumer market survey

(B)QUALITATIVE APPROACH

This approach employs a variety of mathematical models that use historical

data to make a demand forecast but ICI uses average method on the basis of

historical data.

Demand Pattern

ICI Paints have a seasonal demand pattern. They have a greater demand in

peak periods like September, October , November, February and March due

to Eid and marriage occasions. But they have demand is less in rainy

seasons.

INVENTORY & MATERIAL MANAGEMENT

Material management is concerned with following tasks


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Inventory control at stores etc. Supplier selection

Issuing purchase releasesWork force schedules Inbound transportation & Outbound transportation Inventory control at distribution center

Inventory level determination and inventory management is the crucial

events for any organization. Determination of inventory level depends on

the future demand.

USES OF INVENTORY

Inventory is used to

Provide the stock of goods to meet anticipated demand De-couple production from distributionTake advantage of quantity discounts Hedge against inflation Protect against shortage Permit operations to continue

TYPES OF INVENTORY

Following are the types of inventory that might be found in any

organization

Raw material inventoryWork-in-process inventory Finished goods inventory


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INVENTORY MANAGEMENT AT ICI

Management at ICI carries out the basic functions of inventory management

in a sophisticated way. Basically, ICI gives close focus to the inventoryfunctions like purchasing and distribution.

ICIS RAW MATERIAL INVENTORY INCLUDES:

Pigment Resin SolventsAdditives

INVENTORY CONTROL & RECORDS AT STORES IN ICI

ICI is very concerned with inventory records and controls, which is one of

the factors contributing towards their success. Store is headed by store

supervisor or store officer. They told me that they keep record of every

type of material with their weight and quality. They have to maintain record

of ledgers manually and computerized as well. When some departments

require certain part then they issue with the permission of manager (Dept) &

record in their books.

Relationship with suppliers

ICI maintains a very cooperative relationship with their local and foreignsuppliers. They also invite their suppliers to their organization

PROCUREMENT DEPARTMENT

This department arranges for purchase of an item and when that item is to


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be purchased. Then store records it and keeps it in a specified location &

issues it to the desired department.

PROCUREMENT PROCEDURE

Production demand & monthly forecasting is considered keeping in view

lead-time & minimum stock level. ICI purchase its raw material from local

as well as from other countries. They import some items like Titanium

dioxide, which is used in paints and purchased some, items locally

Account department issues checks for payment Lead time for imported

items is 30 to 70 days. When purchased items enter the factory gate then

they are checked by gatekeepers & send to store.

DISTRIBUTION SYSTEM

The distribution system of ICI Dulux is dealer oriented. It has a wide

network of distribution throughout Pakistan but all the distribution is done

through dealers. ICI Dulux has its own warehouses and from there the

products are directly transported to the dealers who ultimately sell them to

the customers.

Therefore the Distribution Channel of all sort of paints is

ProducerDealerConsumer

Dealers

ICI has certain requirements, after these requirements are fulfilled a dealer is

registered and is legally allowed to start the distribution.


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Special accounts with Dealers Code (DC) are opened in thecomputer.

A Promissory Note is signed.

Dealers have to sign a blank cheque for security. Dealers have to submit a copy of their Identity Card (ID card) and a

few more documents.

Lahore and Karachi are advance payment markets where as Multan and a

few other small cities have a credit market.

MODE OF TRANSPORTATION

For delivery purposes, ICI uses Mazda trucks, pickups and small vans.

INVENTORY INSPECTION

At ICI, inspection of inventory is made. Actually, the purpose of inspection

is to see that whether the inventory level has reached to the level that has

been designated as reorder point. If this reorder point is reached then the

order is placed.

MATERIAL REQUIREMENT PLANNING

The basic ingredients of Material Requirement Planning are:

Master Production Schedule Bills of Material On Hand Inventory

MRP AT ICI


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As ICI is dealing with the production of standard products so it has full

knowledge about the ingredients and the quantity of ingredients requiredmaking one container.

At ICI, MRP is not done with great zeal because the company gets theforecasted demand for the whole year and the whole years demand is

segregated into monthly demand by marketing department of ICI. So, the

company gets the real information about the raw material and component

requirement so as to satisfy forecasted demand. Hence, the forecasted

demand plays a vital role in MRP at ICI.

TOTAL QUALITY MANAGEMENT AT ICI

At ICI, quality is employed in each and every step of production process

and it starts from the purchase of raw material and ends at the final product.

RAW MATERIAL CHECKING

All raw materials and their quality are checked so as to ensure that no

material with bad quality could harm the quality of finished product.

QUALITY TESTING

ICI Paints has a proper and standardized Quality Control Laboratory, which

test the quality of paints. They check opacity, density, smoothness, drying,

glass, color, life, viscosity and weight.

Employees involvement in TQM


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It is very necessary every employee should take interest in maintaining the

quality of product. ICI are taking various steps to involve their employees

in TQM by giving them training, continuous feedback, incentives andawards & by encouraging teamwork. They give annual rewards to those

employees who give more suggestions to improve quality.

ISO Certification

The ISO 9000 Standards

ISO 9000 is a set of standards governing documentation of quality program.ICI become certified in 1999 by complying the requirements of ISO 9001.

ISO 9000 actually consists of five documents:

ISO 9000-9004. ISO 9000 is an overview document, which provides

guidelines for selection and use of the other standards.

ICI & ISO 9001

ICI has got ISO 9001 in 1999 by meeting all the requirements, which are

included in this standard. ISO 9001 is a standard that focuses on 20 aspects

of a quality program for companies that design, produce, install and service

products. These aspects include:

Management responsibility Quality system documentation Purchasing Product design InspectionTraining Corrective action


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Produce Installation

Service

ICI & ISO 14001

The ISO 14001 standards require participating companies to keep track of

their raw materials use and generation, treatment, and disposal of hazardous

wastes.

ICI has got ISO 14001 in 1999, covering the areas of :

Environment management system Environmental performance evaluation Environment labeling Life cycle assessment

ICI & MRP 2 Class A

MRP stands for Manufacturing Resource Planning. It is a very complicated

and tough to get, only there 23 companies have got this certificate all over

the world in which ICI is one.

Benefits of ISO 9000 & MRP 2

Enhance the firms quality image Competitive edge Management System improvements


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Good relations with government agencies Enhance Customer satisfaction

Cost reduction Improved productivity and efficiency Increase market share Improve personal job satisfaction and moraleWon more agreements/contracts

SWOT ANALYSIS

Strengths

Having a professional management Friendly and cooperative working environmentTechnical know how & well qualified staff Back selling team, focused directly at consumers, give a way to

communicate directly with consumers.

Brand loyal customers. Excellent financial resources.Well established research and development

Weaknesses

Decision-making on collective basis leads to late decisions.A bureaucratic way of goal setting

Opportunities

Entering into a new market or segment. New governmental and industrial projects. Innovations.


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Threats

Invisible trade barriers. Mushroom industries Strict government policies

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