A PROJECT REPORT ON
ORGANISATIONAL STUDY
CONDUCTED AT

NAGARJUNA HERBAL CONCENTRATES LTD. THODUPUZHA

Submitted to
M.G University

In partial fulfillment of the requirements for the award of the degree of
Master of Business Administration

DONE BY
NIVEA K MOHAN

Jai Bharath Arts & Science College
2008-2010

DECLARATION

I, herby declare that this project report entitled “AN ORGANISATIONAL STUDY AT NAGARJUNA HERBAL CONCENTRATES LTD, THODUPUZHA”, submitted to M.G. university, in partial fulfillment of the requirements for the award of the degree of Master of Business Administration is the original work done by me during my period of study 2008-2010 at Jai Bharath Arts & Science College under the guidance of Mr. Varghese K.X.

Place:

Date: NIVEA K MOHAN

ACKNOWLEDGEMENT

First of all I would like to express my gratitude to GOD who helped me to complete this project.

Then I would like to thank Dr. K.R Baburaj, Director, Jai Bharath Arts & science College, who gave me an opportunity to do the project. I am also thankful to Mr. Varghese K X, Faculty, Jai Bharath Arts & Science College, for his meticulous guidance and constant encouragement throughout my project.

I express my sincere thanks to Mr. Devadas Namboothirippadu, managing director, Nagarjuna Herbal Concentrates Ltd, Thodupuzha, for opportunity accorded to me and to Mr. K.S Unnikrishnan (senior officer, personnel) for his precious time sacrificed for guiding me.

I am also thankful to all the workers, supervisors and manager of Nagarjuna Herbal Concentrates Ltd. for the help and co-operation rendered to me during the study.

Also, it was the love and inspiration given to me by the family members and friends that energized me to complete this venture.

I again extend my whole hearted gratitude to all those who have directly and indirectly helped me during the course of the work.

NIVEA K MOHAN

CONTENTS

| TITLE SL.No. | Particulars | Page No. | | | Introduction | | | | Objective of the study | | | | Scope of the study | | | | Methodology of the study | | | | Company Profile | | | | Product Profile | | | | Vision | | | | Mission | | | | Statement of the Problem | | | | Functional departments–Human Resource DepartmentPurchase DepartmentResearch & development DepartmentQuality Control DepartmentProduction DepartmentMarketing DepartmentSales DepartmentFinance DepartmentMaintenance Department | | | | Swot analysis | | | | Suggestions and Recommendations | | | | Conclusion | | | | Bibliography | | | | | | | | | | | | | | | |

Chapter 1 INTRODUCTION

Introduction

The world of business is changing very fast. Therefore the theoretical knowledge alone will not fulfill the needs of business school students. That means a management student, it is very important to know the activities of any business. In this point of view the scheme of our MBA course provides an opportunity to expose the student to an industry and its operational conditions. This study is conducted at Nagarjuna Herbal Concentrates Ltd., Thodupuzha, one of the leading producers of Ayurvedic medicines in Kerala.

Objectives Major objectives of the study are: * To study the organization profile of NHCL * To acquire knowledge about functional as well as managerial aspects of NHCL. * To understand the organization structure and the working of various functional departments in NHCL. * To develop an undertaking on various management practices followed in different areas of the organization.

Scope

* Help to familiarize with the structure, systems, procedures and functioning of the organization. * Get an opportunity to understand the merits and demerits of large scale industry.

Methodology

Information required for the study was obtained by gathering primary data and relevant secondary data. The primary data was through observation and interviews. Different departments, their roles and functioning are observed and noted. Workers, Managers, Supervisors of various departments are contacted to collect information and opinions. The secondary data needed to prepare this project was obtained from, Company records Magazines Annual report Journals and Website

Chapter 2 COMPANY PROFILE

Over the years, Ayurveda the ancient wisdom of healing from the Indian subcontinent has been on the part of dynamic resurgence as a holistic health care system attracting worldwide attention. Established in the year 1989 “Nagarjuna Herbal Concentrates Limited” has one basic mission that is restoration of Ayurveda to its original glory. It was specifically setup with the mission to contribute to this resurgence in a creative manner in Kerala and elsewhere. By pursuing this path with single minded devotion, the company hopes to become the worthy inheritor of a priceless heritage. Even a casual, glance at the track record of the company would shoe that company is well on its way to achieve its mission and going beyond. In this search for excellence, Nagarjuna has gone one step further. For the first time, it has brought together the Ayurveda and Ashtavaidya school of thought to take advantage of the finer points of both. To sustain this delicate synthesis, Nagarjuna draws on the expertise of advisory committee consisting of renewed Ayurvedic physicians. With in short span of 18 years, Nagarjuna has become the second largest Ayurvedic house in Kerala with turn over of 27 crores, continuously making profit since 1991 and declaring dividends regularly for the last 16 years. The company’s loan and interest payments are so prompt that it has won the admiration of the financial institutions that support it. Nagarjuna Herbal Concentrates Limited is also the first corporate house in the Ayurvedic sector in Kerala. It is also having the certification of ISO 9001-2000. The company provides employment to over 1200 persons directly and indirectly. Nagarjuna state-of-the-art of manufacturing facilities’ are located at Alakode, 6 kilometer from Thodupuzha in the Idukki district of Kerala where traditional values and strict adherence to ancient Ayurvedics texts as the law. This place has proximity to the Western Ghats, which abundant resources of herbal plants. The production facilities are also streamlined to incorporate modern technology have the benefits of its accuracy, hygiene and speed in mass production supervised by experts in Ayurvedic wisdom as well as knowledgeable Engineers. The venture has active participation from the Kerala State Industrial Development Corporation, Kerala Financial Corporation and the Industrial Development Bank of India. The company is promoted by Sri.V.G.Devadas Namboothirippadu, first time entrepreneur with financial support from the about said financial institutions KSIDC and IDBI. An innovative Research and development division with a 70 lakhs Research laboratory and an ever-vigilant quality control section ensures that the Nagarjuna products are of the best quality and true to the Ayurvedic stipulations. These products numbering over 500 are distributed all over Kerala through a network of 800 franchisees which have the unique features of having the service of Ayurvedic Doctors to attend to the needs of the patient consumers in the outlets.

The company has not limited its operations to the boundaries of Kerala alone, but has extended to 17 states outside Kerala. The main areas of operations are Karnataka, Tamil Nadu, Andhra Pradesh, Goa, Delhi, Maharashtra, Gujarat, U.P., M.P., Rajestan, Orissa and Uttaranchal. Nearly 150 franchisees with service of doctors and quality medicine are already operating in outside Kerala. Interest in the form of enquiries is clear evidence that company is intended to expand this franchisees net work in the above said states and particularly the metropolitan cities in an ambition manner. Ayurvedic treatment is another area to which Nagarjuna has paid special attention. Ayurvedic is for rejuvenation of the healthy and curing of the sick. Nagarjuna Ayurvedic centre at Thannipuzha, Kalady in Kerala has all facilities to serve the needs of both. A sister concern of Nagarjuna Research center is a Charitable Institution which is currently implementing an ambitious program for promoting the cultivation of Ayurvedic medical plants and trees, as there cannot be Ayurveda without them. In the few years, lakhs of medicinal plants have been planted under the aegis of the foundation. Basic Research in to Ayurveda publication of Ayurvedic Literature and so on is some of its many projects. Another ambitious project of a Hitch- Ayurvedic retreat is started to come up in Bangalore.

CAPITAL STRUCTURE OF THE NAGARJUNA HERBAL CONCENTRATES LTD.

The company has an authorized capital of 5crores divided into 50, 00,000 equity shares of Rs. 10 each. The issued and subscribed capital of the Rs.2 crores is divided into 20, 00, 000 equity shares of Rs. 10 each. The paid up capital is 1615694 equity shares of Rs. 10,eachfully paid and384306 equity shares of Rs. 10each partly paid up. Of the above shares 180772has been allotted as bonus shares.

Chapter 3 PRODUCT PROFILE

Nagarjuna is an oldest follower of the Ayurvedic tradition. But modern technology has its own contribution to be made by way of hygiene, accuracy and speed. So the company’s manufacturing operation has been mechanized to a large extent. These operators are organized under the supervisions of doctors and health scientists and also Nagarjuna made a detemined entry into the area of patent formulations. The R&D division of Nagarjuna has evolved strength testing procedure for its drugs. A significant development recently is the establishment of modern laboratory set up at of a cost of Rs.70 lakhs. The laboratory has an on-going program of basic research in Ayurveda, besides development of new formulation and standardization of drugs. Nagarjuna has more than 500 products, which can be classified as follows:

Traditional Medicines The important traditional medicines of Nagarjuna are;

Arishtams Asavams Thailams Kuzhambus Ghruthams Lehyams Gulikas Avarthies Choornams Kashayams Kashaya choornams Kashayam capsules

Arishtams These are fermented decoctions of medicines prepared by adding honey, jiggery, sugar and the powder of some medicines including spices. These preparations have alcohol content within a range of 6 – 10% which is generated because of fermentation itself. Self fermented preparations using cashayams are called aristams.

Abayaristam Amritharistam Ashokaristam Balaristam Dasamoolaristam

Asavams These are fermented preparations produced adding honey, jiggery, sugar juices and the powder of some medicines including spices. These preparations have alcohiole within a range of 6-10% which is generated as a result of fermentation itself. Aravindasavan Bhringaragasam Chandanasavam Kasnakasavam Kumaryasavam Lohasavam Thailams These are medicated oils. Decoction juice; milk etc. is added to oils like sesame oil, coconut oils or caster oil and is heated with powdered raw drug, until the water content evaporate completely. In this process, the medicinal extract of the raw drugs make the oil medicated. Amrutbaadithailam Arimebhas thailam Baiaadhaathryadi thailam Brahmee thailam Balaaguioochuaadi thailam

Kuzhambu These are only for external application, unique to Kerala. A mixture of sesame oil, ghee and caster oil substitutes oil base of medicines for external application. Balaswaagandhadi Kushambu Dhanwantharam Kushambu Eladadi Kushambu Karpasathyadi Kushambu etc. Ghrutham Ghrutham are medicated preparations of ghee. Ghee is medicated by adding decoction, powder, juice etc. and is processed until the ghee becomes medicated add water free. Bhrami Ghrutham Gulguluthiktka Ghrutham Indukanda Ghrutham Jathyadi Ghrutham Phalasarpis

Lehyams Lehyams are semi solid preparation of drug, prepared with the addition of jaggery or sugar candy and boiled with the prescribed liquids and fine powder of drugs, until the correct consistency is obtained. Agashtyarasayanam Ajamamsa Rasayanam Amruthaprasa Rasayanam Dasamoola Rasayanam Gomoothra Harithakki etc. Gulikas These are pills /tablets. Common mode of use: Grind and mix the tablet in a suitable kashayam or any other additives. Dsangam Gulika Dhanwanthram gulika. Kanchanara gulgulu gulika Shadharanam gulika Siva gulika etc. Avarthies Avarthies come under the category of medicated oil. Here the selected quantity of oil is being medicated by adding medicines repeatedly. The process of medication is 7, 14, 41, or 101 times. This enhances the potency of oil. dhanawamtharam avarthi 101 ksheerabala avarthi 101 Choornams These are fine powders of herbal medicines. Ashta choornams Elaadigana choornams Hinguvachaadi choornams Rasnadi choornams Thaaleespathraadi choornams Kashayams Disintegrated drugs are concentrated extracted in to water. The drugs are boiled in water and are concentrated. 1. Amruthotharam kashayams 2. Aragwadham kashayam 3. Balaguloochyaadi kashayam 4. Dasamooladuthrayam kashayam 5. Dasamoolam kashayam

Kashaya choornam It is dry mixture of coarsely powdered raw materials used for the kashayams. 1. Amruthotharam kashayam choornam 2. Aragwadham kashayam choornam 3. Balaguloochyaadi kashayam choornam 4. Dasamooladuthrayam kashayam choornam 5. Dasamoolam kashayam choornam Kashayam Capsules Balajeerakaadi Dhanwantharam Kallyanakam Mahaamanjishtaadi Nayopaayam

Ethical Proprietary Medicines Considerable research has been done to find the alternate solutions to classical/ traditional ayurvedic products; Nagarjuna developed a basket of proprietory / patented products. These products are in convenient modern forms such as capsules, tablets, granules, syrups, gels and ointments just the form desired by the contemporary man. These new formulations, however, do not represent a radical change from traditional in their essence and efficiency. At the same time, they cater to the present day requirements related to the TASTE of what is consumed and DOSAGE, making the unpleasant taste of the traditional variants as well as minimizing the dosage. Cardostab tablets Effective in hypertension due to any cause Gason It is a strong anti flatulent drug Haematone Ideal medicines for splenetic and hepatic disorder Halin Effective for common cold, nasal congestion and sinusitis Nagarjuna eladasamoola lehyam For all kinds of cough, sore throat and dyspnoea Neutral tablets For gas trouble, indigestion etc.

Rheumat balm External application in rheumatic pains Smrithi granules It improves the normal brain functions, excellent in improving memory grasping power intelligence thinking power especially in children.

Thaleespathraadi tablets Effective for cough, distaste, spruce and sore throat.

OTC (Over the counter)

Name | Packing | Ayurvedic tooth powder | 50 g | Chyavanaprasam | 250,500 g,1 kg | Dandruff hair oil | 100ml | Digest Drops | 25 ml | Kerapookuladi lehyam | 400 g | Kids oil | 100ml | Nagarjuna agmark Honey | 50,100,200,500g | Nagarjuna ayurvedic soap | 15,75g | Nagarjuna snanna choornam | 50g | Nagarjuna dahasamani | 50g | Nagarjuna thali pody | 50g | Neelibhringaddi Keram | 100ml | Special eladesamoola lehyam(40g*21) | 1 jar | Tuskar balm | 10g | Smrithi granules | 200g |

Group Organizations Nagarjuna ayurvedic centre Nagarjuna ayurvedic institution Nagarjuna ayurvedic treatment service Nagarjuna social service Society Nagarjuna Research Foundation

Corporate Vision To be the best solution provider in health care through Ayurveda Corporate Mission Restoration of Ayurveda to its original glory. Objectives of the organization 1. To carry on the business of manufacturing, processing, formulating and distribution of ayurvedic medicines. 2. To undertake service of ayurvedic treatment centers 3. To cultivate medical herbs shrubs and trees. 4. To make publication based on ayurvedic texts. 5. To promot charitable organization for popularizing awareness about ayurveda. 6. Comprehensive, multi-feed development of ayurveda in all it aspects an expensive propagations of it message.

Quality policy 1. Committed to quality of the product 2. Restore Ayurveda as mainstream health management system. 3. Achieve sustained organizational growth.

Quality Objectives 1. Focusing on process and customer 2. Developing and empowering people

3. Encouraging creativity, innovation and teamwork. 4. Using effective information technology.

Values The company delivers solutions that will pleas its customers. Deliver returns that motivate its investors.

By understanding the deep and fundamental needs of its people, its costomers, its investors and ecosystem. Take actions that strengthen the company and inspire the best in other (by setting an eg in relationship, integrity, honesty, humility and hard work.)

Chapter 4 Functional Departments

The organization structure of N.H.C.L, Thodupuzha consists of 9 major departments. All these departments come under the head of Thodupuzha branch. Departmental heads directly report to the head of the branch. Each department has to perform different functions. Most of the departmental heads are supported by Senior Managers and Deputy Managers. The major departments of NHCL are; 1. Human Resource Department 2. Purchase department 3. Research and Development Department 4. Quality Control department 5. Production department 6. Sales Department 7. Marketing Department 8. Finance Department 9. Maintenance department

HUMAN RESOURCE DEPARTMENT

The literary meaning of resource is wealth, supplies of goods, raw materials etc.which a person, country, etc. has or can use. Then there is a question in corporate human beings under the head resources, which needs little explanations. When we use resources to indicate raw materials or any other type of goods the mean it as a resource in the strict sense because it is something, which can see and feel. They are Hardware Resource. The ability of work is quality, which cannot see, they are software resources. What is HRM? Human Resource Management is based on the ideas and techniques developed to enhance worker motivation, productivity and performance. The HRM model emphasizes: The need to search for new ways of working The Central role of managers in promoting change The treatment of workers as individuals rather than part of a collective work force etc.

Personnel department Human beings are top most living beings in the evolutional hierarchy. In the religion concept God has created human beings. The overall functions of the organization lead by rational human beings. “Organization is the place where managers practice the art of management” Personnel Management deals with:- Recruitment and selection Training Performance appraisal Pay and allowance Employees benefits As and when a vacancy arises, personal department notes the post. Then the personal department publishes the vacancies in the leading newspapers. After receiving the application from candidates, the department goes for scrutinizing.

1. Recruitment Recruitment has been regarded as the most important function of the personal administration, because unless the right types of the people are tried, even the best plans, organization charts and system would not do much good. The first stage in the process, which continue with selection and ceases with placement of candidates. It is the next step in the procurement function. Various methods of recruitment are:-

1.1. Direct method These include sending traveling recruitment agent to educational and professional institute from employee contract with public and manned exhibition. One of the widely used direct methods is that ‘sending of recruitment agency to college.

1.2. Indirect method It involves advertising in newspaper, in the radio, television and professional journals as well as in technical magazines. 1.3. Third party method These include the use of commercial or private employment agencies as recruitment agencies. 1.4 Selections When an adequate pool of qualified candidate is available, the next step is to identify the best candidate. Selection involves screening or evaluation of applicants to identify those who are best suited to perform the jobs, which have fallen vacant in an organization. it divides the candidate who offer themselves for appointment into two categories namely those who will not be employed. It is the process of eliminating or rejecting many unsuitable candidates to choose the few suitable Applicants.

SELECTION PROCESS

Priliminary interview
Application Blank
Employment Test

Physical Examination

Final Approval

Reference

2. Training It is the act of increasing the knowledge and skill of an employee for doing a particular job. In NHCL, fresh hands will be selected to trainee for a period of 1year. Also for exiting employees, refresher training by way of lectures, education, class, external training are being conducted. Various types of training programs NHCL are; 2.1. Orientation training It’s a training program used to induct a new employee in to a new social setting of his work. Here the new employee is introduced to his job situation and to his co-employer. He is also informed about the rules, work privilege and activities of the company. NHCL offers the following training programs at their facilities at alwaye near Cochin, Kerala to impart the general awareness on Ayurveda and its treatment with special emphasis on Nagarjuna special treatment.

2.2. On-the job training method In this training method emphasis on leaning while an individual is encaged in work. This method can be suitable for all type of employees in NHCL. Thus people con lean by working on jobs, mainly NHCL follows two types of training methods, position rotation and apprenticeship training.

2.3. Off the job training method In this method a trainee has to leave his place of working and devote his entire time for training purpose. During this period training doesn’t contribute any thing to the organization. Special courses and lectures are knowledge based training method. Basically it is aimed at creating and awareness of knowledge of fundamentals. NHCL having very good training facilities for executives as well as workers, also providing training for the external executives and workers. 2.4. Ayurveda awareness program To proved a general awareness about the basic principles of science based ayurveda and to establish the special role of ayurveda in the health care system Nagarjuna attempted a lot. Hence, NHCL is arranging refresher training for updating employee knowledge. 3. Performance appraisal It refers to the formal procedure used in working organization to evaluate the personalities and contribution and potential of group members. Actually this system employer gets the employee merits like initiatives, dependability, job knowledge, quality of workers, target fulfillment, personality etc. with which performance is rated. The HR department prepares performance appraisal forms and it is forwarded for filling to concerned department supervisors where the trainee was employed. Normally the probation period in NHCL is only for 6 month. At the end of the probation period, the same department and decided about the regular position of the same in the company by verify the performance during the probation period. 4. Pay and allowances NHCL has arrived at a memorandum of settlement on a long-term bases with there workman in respect of wages, allowances and fringe benefit.

In the memorandum of settlement, the terms and conditions of the same are applicable only to workman, starting grade 1-10, who are covered by the industrial disputes act, 1947. Besides basic salary it contains the rate of fixed dearness allowance also.

5. Employee Benefit (Welfare Measures) a. House rent allowance (HRA) The company is giving house rent allowance benefit at the rate of 10% basic material reinforcement. b. Insurance policy All employees who are not receiving the ESI will get insurance policy. Their families also get these benefits. c. Benefits of ESI IN, Nagarjuna, insured person or members of the family is entitled to receive medical benefit free of cost whenever he fall sickness.

Other Benefits a. washing allowance b. soap c. Uniform d. Shoes e. Marriage Gift f. Yearly Sports day g. Canteen Facilities h. Group insurance scheme i. provident fund j. bonus k. housing Loan Interest Subsidy l. travel Concession m. Payment of Bonus Act n. Health o. Blood Donation Form p.Recreation Club q. Trade Unions

PERSONNEL DEPARTMENT
Employee’s service

Employees

Wages & salary administration
Industrial relation
Organisation planning & control

Recruitment
Employee’s classification
Communication

Organisation planning
Medical service

Selection

Rate determination
Collective bargaining

Managing resources

Recreation

Indoctrination

Merit rating

Training
Employee’s discipline

Promotion & transfer

Personnel service

Supplemental competition

Personnel research

Separation

Safety

Work schedule

Personnel security

PURCHASE DEPARTMENT

2. PURCHASE DEPARTMENT

The company is purchasing 400 tones of material per year. Assistant manager of purchase and two other staff are concerned with the purchasing process. Procurement is always on the basis of the requirement or needs. Tenders or quotations are invited from suitable vendors for materials of regular use. ‘Just in Time’ is the buying technique practiced for purchasing raw-material for immediate and periodic requirements. They check and approve vendor’s invoice for payment. Structure of Purchasing Department Purchase department
Manager
Executives

2.1. Stores department

Production department had separate store areas for raw material, work-in- progress, finished goods and certified products. These materials are handled and stored depending upon its responsible for providing day to day material requirements of various departments. 2.2. purchasing procedure Purchasing activities of a firm is performed by separate purchasing departments. For the raw materials the production department sends an indent to purchasing department about their recruitments. The purchase manager verifies the indent and makes the order for material. And the cop of purchase order sends to purchasing department. The raw materials are collected from the agents. The purchase departments make the orders to the agents, that is., how much want, what are the materials they want? etc. They make the delivery at the specified time. Purchase process completes only after the successful completion of the check by the Quality Department. If the material haves the quality, it is allowed entering in to the inventory. This is the case of raw material, but for the other items each department can make their indent to purchase department and they purchase and gives to the departments.

2.3. Inventory control The company have raw material inventory and finished goods inventory. For the production of Ayurvedic medicines need huge volume raw materials. So the firm wants to buy it bulkily and they should store it. And also some of the materials are not available at every season so that they should purchase it at the available season and stored it for the future. Nagarjuna producing large quality of finished products, so they need an inventory for storing both the raw material and the finished products. The control of this inventory should be done very carefully because careless operation may create unnecessary cost. Products move bulkily to the area office. They are situated at the places called Muvattupuzha Mavelikkara Shornoor Vadakara Delhi Mumbai Bangalore

The inventory is followed the FIFO method for both the raw material and for the finished products. FIFO means First In First Out, the company uses the raw materials which come first and also send the finished products, which is produced first.

RESEARCH AND DEVELOPMENT DEPARTMENT

3. RESEARCH &DEVELOPMENT DEPARTMENT The research and development division at Nagarjuna had evolved stringent testing procedures for its drugs have a significant development recently in the establishment of modern laboratory set up. The laboratory has an Ayurveda besides development of new formulation and standardization of drugs. An innovative research laboratory and an over vigilant quality control section ensures that Nagarjuna products are true to the Ayurvedic traditions and stipulations. 3.1. Nagarjuna research foundation The foundation consists of members who have distinguished themselves in medicines and other disciplines. This is registered as a charitable trust. It is managed by well trained and efficient doctors and has a large number of luminaries from different fields of science and other disciplines. The main objects of foundation are to spread of the message of Ayurveda far and wide to bring its versatile medical system closer to place. The foundation encourages and supports fellowship based research in colleges and other organizations and short term Ayurvedic course for allopathic doctors and general public.

3.2. Nagarjuna medical plants Research Wing Nagarjuna has started die manufacture of Ayurvedic medicines since 1989, has developed a separate wing to receive this and bring a number of medical plants which can be easily be used as home stead medicines for various diseases. Nagarjuna Medical plants Wing propagating the use of this plants from each and every concern in Kerala and conducting various seminar and exhibitions to make aware the common public the easy accessibility of such plants and it is medicinal usage. Research and development has evolved stringent method for analyzing and testing of raw material and end product. The nagarjuna group holds the second position in the industry. Qualified scientists and dedicated team of quality experts are engaged in the research. Raw material standardization and sharing of the technology with the industry. Product department with proof in allopathic language. This department does production process standardization. Producing the traditional products in the modern convenient forms.

Structure of Research & development department

Research and development department

Manager
Officer
Technician

Assistants

QUALITY CONTROL DEPARTMENT

4. QUALITY CONTROL DEPARTMENT Nagarjuna has full-fledged and most modern quality control laboratory. It takes active measure to check the quality of raw materials and end products against the standards. Batch to batch variations re checked and through proper quality check.

Structure of quality & control department Quality & control department

Manager
Officer
Executives

5.1. Quality Control Measures A quality controller hands Quality Control Department. The quality controller should be a doctor. The firm gives more important to quality because they are preparing the medicines for the people. The company mission is to produce quality products. 4.2. Quality policy 1. Quality of products 2. Restore Ayurveda as a mainstream health management system. 3. Achieve a sustained organizational growth.

4.3. Quality Objectives 1. Focusing on processes and customer. 2. Developing and encouraging people. 3. Using effective IT. 4. Encouraging creativity, innovation and team work.

PRODUCTION DEPARTMENT

5. PRODUCTION DEPARTMENT

NHCL has a product line of 500 medicines. They are marketing the products all over India and exporting to the European and UAE countries. A sequence of procedure involved in the preparation of the Ayurvedic medicine. For the preparation of the medicine process are start from 3 or 4 months before, i.e. 3 or 4 months before the company collects materials and start the preparation. Some preparations are through the hands i.e. manually and all these materials are passed through various machines and preparing the final output. Some of the partly finished goods keep one or two months for the preparation of final products. Most of the ingredients are roots, leafs, seeds, flowers, fruits of medical plants. They convert this in to powder and pulps for the medicine preparation. After the preparation the medicines are packed and distributed. Ayurveda, the knowledge or science of life longevity has a history as long as human civilization. Also known as the Indian system of medicines, Ayurveda is India’s timely gift to ma kind.

5.1 Production planning and control Production planning of the Ayurvedic medicines are mainly depends on the season. The demands of the medicines are different in different in season depending upon the season, the target or the production is adjusting. They are using the record for the planning of the production of the medicines in each season and they analyze the demand of each product line at each season. For the high demanded season they purchase the materials in bulk and start the production work. They used hired labours or they start the 3 shift operations. In the off season they cut the 3 shift operation or avoid the hired labours. Climate is the other dependant factor of production planning. For e.g. the rainy season, in this reason the Ayurvedic medicines are very good demand. The export of the medicine is also a factor for the planning. Competitions is the another factor of the control of production. Depending upon the price of the raw materials the production can be controlled. 6.2. Production facilities The plant is equipped with modern machines and operations are organized under the watchful eyes of talented physicians and health scientists. Production and manufacturing facilities are fully geared for the mass production of ayurvedic medicines in strict adherence to ancient ayurvedic scriptures. Incorporation of modern technology for mass production and upholding traditional values make the facilities well integrated synthesis of tradition and modernity.

6.3. Raw materials used NHCL uses around 60 type raw materials for production. So a detailed classification is not possible. A general classification of raw materials used in the manufacture products are; 1. Raw drugs 2. commercial items 3. Oils The raw materials and other items are transferred to the store and the issues of these items are done from there.
Production department
Manager

Supervisor

Labourer

MARKETING DEPARTMENT

6. MARKETING DEPARTMENT

Nagarjuna has emerged as one of the top-most leader of Ayurveda market in Kerala by means of its marketing strength. The core of the marketing network is the chain of exclusive franchisee clinics spread over the states of India namely Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Goa and Delhi etc.

Nagarjuna has a wide marketing network; which includes over 800 franchises outlets in Kerala over 150 franchises outside the state. The unique feature of these franchise clinics is the presence of consulting physician and the ready availability of Nagarjuna brand drugs at all times. Sales depots service these agencies. There are 4 sales depots in Kerala in place such as shornoor, Vadakara, Muvattupuzha, Mavelikara. The entire marketing activity is guided by a central marketing organization based at Nagarjuna Headquarters at Thodupuzha, Kerala.

The marketing program includes propagation of Ayurveda, which is facilitated through sales promotion programs, social marketing activities like medical comps, seminars, awareness etc. In Kerala, the marketing operations of Nagarjuna are mainly under division’s 0f Generic division, Ethical division and OTC division.

Generic division: - This division handles the marketing of classical preparations (traditional medicines, e.g. Kashayam, Arishtam etc.) and about 75% of the turnover of the company is derived from this division.

The generic division is under a regional sales manager and four area sales managers and twenty marketing executives to support him.

Ethical division: - This division handles marketing of ethical products for Cardostab, Haemation etc.

One regional sales manager heads this ethical division and four sales manager and twenty marketing executives to support him, about 15% turnover of the company come from this division.

OTC division: - this division deals with marketing of consumer products. These products are sold to agencies, other Ayurvedic agencies and the consumer retail shops and nearly 10% of the company turnover is derived from this division.

6.1 Nagarjuna Agency/Franchise network

Agency/franchise means the exclusive, showroom of Nagarjuna products and services. These agencies are stocking medicines of Nagarjuna only and are providing the service of the company doctor or contract basis doctors from the company. The agencies are

entered into an agreement with Nagarjuna to be a business association of the company. The agencies act as a local brand ambassador for Nagarjuna Ayurvedic group.

The agencies will be displaying the name board of the company as per the company’s specification. The agents will be participating with the company marketing team for all market development. They will be abiding by the company trade policies, credit policies, marketing strategies and other relevant policies.

Marketing is the management function, which organizes and directs all those business activities assessing and converting customer’s purchasing powder in to effective demand for a specific product or service. And in moving, the product or service to the first consumer or user so as to achieve the profit target or other objectives set by a company.

The term supply chain may be too limited; it takes a make-and-sell view of the business. It suggests that raw materials, productive inputs and factory capacity should serve as the starting point for market planning. A better term would be demand chain, because it suggests sense-and-responds view of the market. Under this view, planning starts with the needs of target customers, to which the company responds by organizing resources with the goal of building profitable customer relationships.

A company’s channel decisions directly affect every other- marketing decision. The company’s pricing depends on whether it works with national discount chains, uses high-quality specialty stores or sells directly to consumers via the web. The firm’s sales force and communications decisions depend on how much persuasion, training, motivation and support its channel partners need.

6.2 How Channel Members Add Values

The use of intermediaries results from their greater efficiency in making goods available to larger markets. Through their contacts, experience, specialization and scale of operation, intermediaries usually offer the firm more than it can on its own. 6.3 Policies of Distribution intensity

At each level of distribution, decisions are made on the desired number of outlets. It is advisable to decide first upon the policy to be followed at the distribution level nearest to the final buyers, because generally the same decisions must be applied at other distribution levels.

i. Mass distribution

The company following a policy of mass distribution aims for maximum sales exposure by securing distribution through all those outlets from which final buyers might expect to purchase the product. This policy is used in distribution many customers convenience items.

ii. Selective distribution

Selective distribution means selecting only those outlets that can be best the manufacture’s interests. Criteria are set up to provide guidance in the selection of accounts these criteria relate to the sizes of orders, volume of purchases, profitability, type of operation and geographical location.

iii. Exclusive agency distribution

It is an extreme form of selective distribution that means severely limiting the number of intermediaries. The manufacturer makes an agreement, either written or oral, with a middleman in each market area stipulating that distribution of the manufacture’s product or products with in that area is to be confirmed solely to that middleman. It is used when the producer wants to maintain control over the service level and service outputs offered by the resellers.

Using exclusive agency distributors does, however, have a number of attractive features. It is easy to develop distributor’s enthusiasm for the product and stimulate the distributors to sell it aggressively. Relation between sales personnel and the middleman are likely to be of long duration and after the agreements have been reached, sales people can focus more on “servicing” and less on “selling”.

6.4 Marketing channel functions A marketing channel is essentially method of organizing the operation to more goods from producers to consumers.

The purpose is to overcome various gaps that separate the goods and services from those who would use them. The functions performed by the middleman or marketing channels are as under.

1. Research: - gathering the information necessary for planning and facilitating exchanges.

2. Promotion: - development and dissemination of personnel communications about the product offer.

3. Contract: - searching out and communicating which are the prospective buyers.

4. Matching: - shaping and fitting of the offer to the buyers requirements and includes such activities as standardization, grading, assembling and packing.

5. Negotiation: - an attempt to reach final agreement on price and other terms of the offer so that transfer of ownership could be affected.

6. Physical distribution:- transporting and storage of the goods.

7. Franchising:- the accusation and dispersal of funds to cover the costs of the channel

8. Risk taking: - the assumption of risk in connection with the channel work.

6.5. Marketing middleman

The middle man available and their willingness to represent a particular manufacture r and the relative costs using them often dictate marketing channels. A manufacturer may be constrained in his choice of channel by the availability of a particular middleman. Thus, if a middlement of that type wanted by marketers are not available or those wanted do not take on the product line, the manufacturer may have to take second choice. The costs of using different middleman relative to its own sales and profit goals influence the manufacturer are choice of middlement.

6.6. Types of middleman Middleman is the person who provides a link between the manufacturer and the customer, they facilitate the purchase and sales of goods and services and also performing the marketing function as stated above. They change for their service and to that extent; they are responsible for the increase in the costs of product to the ultimate consumers or user. Middleman may be broadly classified into two categories, namely (1) mercantile agents or agent middleman and (ii) merchant middleman. 6.7. Mercantile Agents They do not handle the good in the capacity of owners, but they render important services for the exchange goods between the manufacturer and the consumer. Mercantile agents are following types:- i. Commission agent ii. Factor iii. Auctioneer iv. Broker

6.8 Mercantile Middleman

Merchants are the dealers in goods and services who purchase and sell their own name for a margin of profit. Mercantile Middleman may classified into two categories,

i. Wholesalers ii. Retailers

SALES DEPARTMENT

7. SALES DEPARTMENT

The company had a huge market and on the basis of the market and competition they fix their selling force. Last year that is in the year up to 31st march 2007 their total sales is Rs. 182,357,214.

To motivate the sales person they give many incentives to the sales man. The firm gives commission to the sales man on the basis of the target achieved by them they give the transportation charges to the sales man. Target fixation is on the basis of the demand contribution, season, availability of raw materials etc.

7.1. Distribution

The firm had four area officers in the different places in Kerala. All the finished products are transferred to these four officers and from these officers the products are delivered to the agencies. The firm uses agencies to retail their product inside the Kerala and C/F agents to but side states. Nagarjuna exports its products to European countries and Middle East countries.

They give 30% discount to agencies if they pay the money at the right time. Distribution channels are motivated through giving free transportation facilities. They had their own vehicles to move the medicines from the area officers to the agencies. The delivery made on cheques, allowed them a credit period of 45 days.

FINANCE DEPARTMENT

8. FINANCE DEPARTMENT

NHCL is a public limited company had own authorized capital of 5000000 equity shares of Rs. 10 each and had a paid up capital of 2648000 Equity share of Rs.10 each fully paid. The firm prepares its final accounts at the yearly intervals and the accounts are allowed to check by the auditors in the every financial year and report is published to the shareholders. They prepare the budget for each year and conduct a budget meeting on every month to evaluate the variation from the prepared budget. And also prepare additional budget for the additional expenses incurred between the financial years. They are following standard costing system. They analyze and evaluate it for the future operation.

To evaluate the future performance they are using ratio analysis. Mostly using ratios are Output/turnover ratio, Net profit ratio, debt-equity ratio etc. which help them to evaluate current year performance with the last year and also help to compare the performance with the competitors.

For the bankers they are preparing the cash flow and fund flow statement. The company does not have any clearly defined dividend pay out policy. If the company had enough profit they gave it as the dividend. Last time they distribute the dividend in 2003. They follow the systematic control of inventory. The company have raw material inventory and finished goods inventory. The sundry debtors are allowed a credit period of 45 days soon their cheques are received. For starting an agency firms collects certain

money as agency advice and the delivery of the products on the same amount of cheques.

Net Profit Earning After Tax - Rs. 416000(2007-2008)

Earning Per Share - Rs.0.16/-
Basis of accounting

The financial statements are prepared on the basis on accrual basis except for sales returns, which is accounted on receipt basis. Valuation of inventories

1. Raw material and packing materials - At cost.

2. Stores Spares and Consumables - At cost.

3. Finished goods - AT lower of cost
4. Work in progress - At cost.

Balance Sheet As on 2007-2008

Position of mobilization and development of funds | 2007-2008 | Total AssetsTotal Liability | (‘000)146442.00146442.00 | Source of funds | | Paid up capitalReserve and SurplusSecured Loan Unsecured loanDiffered tax Liability | 264802852377842101923405 | Application of Funds | | Net fixed assetsInvestmentsNet current assets | 410781695488410 | Performance of the company | | Turnover/ other incomeTotal ExpenditureProfit before taxProfit after taxEarning per share is(Rs)Dividend (%) | Rs.(‘000) 265602.00265322.00282.00416.000.16 |

MAINTENACE DEPARTMENT

9. MAINTENANCE DEPARTMENT

Production in the concern depends largely on the maintenance department. In Nagarjuna, preventive maintenance aims to locate the source of trouble and to remove them before break even down occurs. So that the machines are kept in the proper condition so as to maintain the quality of the product and to have few rejects.

Maintenance department
Officer
Labour

10.1. Reason Behind the Success of Nagarjuna

In India Ayurveda is the most ancient and indigenous science of life. Most of the ayurvedic medicines are usually prescribed in the traditional forms. NHCL was set up for the purpose of providing good health to people.

At present Nagarjuna is the second leading herbal medicines makers in the state of Kerala. There is various

Reason behind the success of Nagarjuna. They are given below,

1. Nagarjuna has got a well planned marketing system. The marketing operation of Nagarjuna is organized through 950 agencies and hundreds of stockiest. Therefore, it help to popularize the company in a great throughout the state and even in abroad 2. Nagarjuna maintains a well established research and development departments. For conducting research and experience modern labs with every facility have been established. 3. Nagarjuna has also adopted a good quality control system. This help to improve the quality of products. 4. agarjuna has been able to get dominant role in the manufacturing and marketing of ayurvedic medicines. This is made possible by the help of good management highly talented and dedicated team of doctors and health scientists.

Cost Reduction Technique

Continuous cost reduction works are performing in the organization. Firms look each and every area to reduce the cost. For example they make bulk purchase of raw material when the materials having the lower price. The company giving only a part of price for the boards and hoardings for the advertisement of the firms, balance amount is bared by the agencies.

The firm uses agencies for retailing their products. It is also cost reduction method. Because they need not worry about retail out lets. To reduce the cost for labours they are using the hired labourers at the time of high demand or need large production or they are using three shifts instead of two shift. In these ways they reduce the cost of recruiting and selecting the new employees.

Waste Disposal

Like all other medicine manufacturing industry it has also producing some waste, but that are only biological waste. In the production of the Ayurvedic medicines the material are only natural, mostly roots, leaves, fruits, and skin of plant, flowers, spices, sugar, milk etc. so the waste are not harmful to the nature. The waste can be used as natural fertilizers. And some of the wastes are in the form of water, and the firm has a treatment plant of disposing the waste. The medicines manufacturing firm should keep the surrounding clean then only they can make the products hygienically. So the waste disposal functions efficiently and effectively.

Organization Chart of Nagarjuna Herbal Concentrates Ltd.

Managing director

Chief executive

General manager

Purchase manager
Finance manager
Marketing manager
Production manager
R & D
Manager
Personnel manager

Assistant manager

Assistant manager

Assistant manager

Assistant manager
Assistant manager

Assistant manager

Workers manager Accounts officer

Assistant manager

Stores & maintenance manager Operator

SWOT ANALYSIS

SWOT ANALYSIS

SWOT analysis is simple framework for generating strategic alternatives from a situation analysis. It is applicable to either corporate level or business unit level and frequently appears in marketing plans. SWOT stands for Strengths, Weaknesses, Opportunities and threat. SWOT analysis is useful when every limited amount of time is available to address a complex strategic situation.

SWOT analysis is a tool for audit an organization and its environment, it is the first stage of planning and helps marketers to focus on key issues.

A scan of the internal and external environment is important part of the strategic planning process. The initial SWOT analysis SWOT stands Strengths, Weakness, Opportunities and Threats underlying planning process.

Strengths

* NHCL has its own patent products * NHCL produces good quality products at reasonable price * Customer satisfaction index * Excellent Brand Image * Good & Efficient Marketing System * Strong R&D * Good Relationship between management and trade union * Wide distribution network * Good Customer relationship * Social Objective and not profit motive company * Producing more than 500 products

Weakness

* Non Availability of getting medical plants * Low number of production Manufacturing units * Advertising is very low

* Some of the products have bad design * Production is low

Opportunities * Good Demand * Scope for Innovation and R&D * Medical plants cultivation & preserving rare medical plants * NHCL is now trying to link with tourism area

Threats * Entry of duplicates * Cut throat competition * Permanent customers may substitute other product * Raw material extension * Scarcity of raw material

SUGGESTIONS & RECOMMENDATIONS

SUGGESTIONS & RECOMMENDATIONS

SUGGESTIONS 1. The company may conduct medical and free check up campaigns in important location for popularizing the Nagarjuna Herbal Concentrates Ltd. During this campaign the company has to depute experienced doctors to meet the customers and explain the important of medical and ingredients. 2. The company may also share promotional risks with agencies i.e. Agencies co-operative advertising programs in which expenses are shared with agencies. Even if the share of expenses by the agency is less as compared to the company, the company may work together with the agency and make the promotion program a successful one. 3. The company may also sometimes set sales volume quotas for individual agencies and if the agencies meet or exceed their sales quotas within the sales campaign period, they pan receive price, award often in the form of trips for agencies and their spouses, which will often motivate the agencies to strive very hard to achieve the sale volume quotas. 4. Keep the tradition and heredity of Ayurveda and do not make any compromise with regard to the quality and validity of the product to attract the customers.

CONCLUSION

CONCLUSION

Nagarjuna herbal Concentrates Limited as ISO 9001: 2000 certified company was establish in the year 1989 with the mission to contribute to ayurveda in a creative manner in Kerala and else where. Within a short span of 17 years, Nagarjuna has become the second largest Ayurvedic house in Kerala, with a turnover of 27 cores and 80% of the sales turnover is derived from the agency network which reveals the importance of network, Nagarjuna has a wide marketing network, which include over 800 retail outlets
In Kerala and over 150 outside the state. The unique features of the franchisee clinic are the presence of consulting physicians arid the ready availability of Nagarjuna brand drugs at all times.

No manufactures marketing program is complete if it lacks plans for securing and maintaining the cooperation of the distributive outlets. The fortunes of manufactures rise and fall with those of their distributors and dealers. If the distributors and dealers succeed in selling the products, the manufacture also succeeds and if they fail, the manufactures fail.

Most of the agencies of Nagarjuna are satisfied with them and the well structured organization and the qualified personnel in all departments also contribute to its success.

BIBLIOGRAPHY

Financial management: I.M. pandey Published by Vikas publishing house, 2005

Management principles : Peter .F.Drucker Marketing Management : Philip Kotler

Personal Management : Mamoria C.B

Annual Report OF NHCL: 2006-2007, 2007-2008

Website : www. Nagarjuna.com