Internship on Accounts and Analysis of Debtors of EBY Fasteners.

Submitted to :

Prof. Priyanka Chatta

Professor

Pillais Institute of Management Studies and Research, Panvel

Mumbai University

Submitted by :

Mufaddal Salim Malbary

Date of Submission :

31st July 2018

 Acknowledgement

This report, based on two months study, is the part of MBA program, which helps me to gather
practical information, which is necessary for my future life. I would like to express my deep
respect to my honorable academic supervisor Prof. Priyanka Chatta, Professor, Pillais Institute of
Management Studies and Research for giving me her valuable time and all the necessary
guidance, which inspired me to prepare this report.

During this two months period I have gone through the various departments of EBY Fasteners
and especially gathered knowledge about the Accounts & Finance department with their great
cooperation. In preparing the report I receive active cooperation from the Head of the
departments, Accounts controllers, senior officers and staff of EBY Fasteners. This report suffers
from many shortcomings although I have exerted my best effort while preparing this report. I
seek excuse for the errors that might have occurred in spite of the best of my efforts.
Executive Summary
Part A

1. Introduction to the Project

2. Brief Company Profile
 3. Industry Analysis

3.1) PESTEL Analysis of Manufacturing Industry

Political Factors

The Government of India has taken several initiatives to promote a healthy environment for the
growth of manufacturing sector in the country. Some of the notable initiatives and developments
are:

 As of March 2018, Government of India is in the process of coming up with a new

industrial policy which envisions development of a globally competitive Indian industry.

 In Union Budget 2018-19, the Government of India reduced the income tax rate to 25 per
cent for all companies having a turnover of up to Rs 250 crore (US$ 38.75 million).

 Under the Mid-Term Review of Foreign Trade Policy (2015-20), the Government of
India increased export incentives available to labour intensive MSME sectors by 2 per
cent.

 The Government of India has launched a phased manufacturing programme (PMP) aimed
at adding more smartphone components under the Make in India initiative thereby giving
a push to the domestic manufacturing of mobile handsets.

 The Government of India is in talks with stakeholders to further ease foreign direct
investment (FDI) in defence under the automatic route to 51 per cent from the current 49
per cent, in order to give a boost to the Make in India initiative and to generate
employment.

 The Ministry of Defence, Government of India, approved the “Strategic Partnership”

model which will enable private companies to tie up with foreign players for
manufacturing submarines, fighter jets, helicopters and armoured vehicles.
  The Union Cabinet has approved the Modified Special Incentive Package Scheme (M-
SIPS) in which, proposals will be accepted till December 2018 or up to an incentive
commitment limit of Rs 10,000 crore (US$ 1.5 billion).

Economic Factors
Aside from social factor, another thing that affects the manufacturing of your business is
economic factors. This is basically the present economic condition and the cost of living of your
target customers. Once there are sudden economic changes that might appear, this might limit the
manufacturing efficiency of your business due to lack of demand. So before you open your
business and manufacture the products you offer, take time to assess the demands of your
customers. The higher the demand, the more promising the manufacturing of your business is.
Thus, you can get higher profits.
Social Factors
One of the external factors that affect the business is social. This includes the social cost and
benefits, the lifestyle and the demographics. In other words, this factor is more on the preference
of your own customers. Make sure that if you plan to open and manufacture products, these
should be according to the demands of your customers. This way, you can get a chance to earn
even higher income than what you expect. You can conduct a survey regarding the possible
needs of your customers in relation to social factors. This helps a lot in overcoming the effects of
this factor.
Technological Factors
Technology plays a vital role in the decisions and options of customers. This is especially
applicable for businesses manufacturing devices and other technological products. Once there are
new gadgets produced in the market, people will go crazy to purchase these stuffs. The end result
is that those gadgets produced in the past months are no longer in demand. So if you are in
manufacturing business, make sure to continuously innovate or enhance your own products to
live up to the expectations of your customers. This is also applicable for people who are planning
to open other kinds of businesses.
Environmental Factors

A. Environmental Policies.
Environmental policies are another external factor that can impact the strategy of a business.
Environmental policy is the commitment of a business to the regulations, laws as well as other
policy mechanisms that are concerned with environmental issues. Environmental policy impacts
businesses because the law implies organizations to change their operational procedures and
equipment so as to meet those standards which can cost businesses some good amount of money.
B. Climate Change.
Climate change became an insidious threat to businesses as its pace can be recognized only when
it is taken into consideration on the basis of decade-after-decade. Increasing issue of global
warming and adverse weather conditions in the recent few years, it is difficult for companies and
organizations to operate equally in every type of weather condition. Businesses that are directly
dependent upon adequate water supply e.g., field sports or agriculture will be affected adversely
if climatic changes resulted in reduced rainfalls. Even consumers are becoming aware and keen
about this factor and are prone towards those brands which are saving the environment or
supporting this cause.
C. Green Agenda.
Business-related activities impact the environment; however, the environment also has an effect
on businesses and the market environment. Now enterprises have realized that in order to
achieve business goals, there is a need to draft environmental-friendly policies. Green agenda is a
plan where enterprises manage their operations in such a way so that there is minimal negative
impact on the local or global environment. In order to be environmentally responsible,
corporations need to devise plans and procedures in their operations and activities which is
beneficial not only company but, for the overall environment as well.
D. Pollution.
Pollution can also have an impact over business strategies. Pollution may cause some major
environmental events which can result in the disruption of supply chains or an increase in the
cost of raw material. Organizations need to monitor such events and develop contingency plans
so as to deal with them.
E. Availability of natural resources.
Amongst external environment factors, this factor refers to the physical environment of a
business. Natural resources are very important for most businesses and many corporations have
natural resources as their major raw material. Lack of natural resources can hinder an
organization’s producing ability and hence its output.

F. Recycling.
Recycling is another aspect of a greener environment. The cost of dumping waste in landfills is
increasing and is resulting in not only shortage of wastages but, it also provides harm to the
environment. Recycled materials not only results in making the production process cost-effective
but, it also helps the business to save some money and helping the environment.
G. Waste Disposal.
Although, there has been a positive trend towards recycling of waste materials, still there is
several businesses which dump wastage in landfills. This not only increases their cost of
dumping waste but, is also harmful to the environment in which the business operates.
Legal Factors
A. Consumer law
Consumer law (alternatively known as consumer protection) is designed to protect consumers
from fraudulent companies or practices, and preserve their rights in the marketplace. “How does
this affect businesses though?” you might ask. For example, consumer law results in large
companies having to dedicate a fair amount of their resources into putting out detailed
information about their products and policies. On the other hand, consumer law in itself makes a
business for some private watchdog companies.
B. Employment law
Employment law, also known as labor law, dictates how companies’ employees should be
treated. Minimum wage laws can limit the various different employment possibilities a company
can offer, child labor laws can affect the way tight-knit home businesses in third world countries
operate, and dismissal laws can make firing employees (for whatever reason, perhaps
unproductivity) that bit harder.
3.2) Porter’s Five Forces Analysis of Manufacturing Industry

A framework for diagnosing industry structure, built around five competitive forces that erode
long-term industry average profitability. The industry structure framework can be applied at the
level of the industry, the strategic group (or group of firms with similar strategies) or even the
individual firm. Its ultimate function is to explain the sustainability of profits against bargaining
and against direct and indirect competition.
Porter's five forces, or factors that shape business strategy are:

 Threat of entry to the market from other organisations

  Supplier power

 Buyer power

 Availability of substitute products

 Existing competitors

The elements involved with each force are shown in the lists below

Entry Barriers

 Economies of scale

 Proprietary product differences

 Brand identity

 Switching costs

 capital requirements

 Access to distribution

 Absolute cost advantages

 Proprietary learning curve

 Access to necessary inputs

 Proprietary low-cost product design

 Government policy

 Expected retaliation
Determinants of Supplier Power

 Differentiation of inputs

 Switching costs of suppliers and firms in the industry

 Presence of substitute inputs

 Supplier concentration

 Importance of volume to supplier

 Cost relative to total purchases in the industry

 Impact of inputs on cost or differentiation

 Threat of forward integration relative to threat of backward integration by firms in the

industry

Determinants of Buyer Power

Bargaining Leverage

 Buyer concentration versus firm concentration

 Buyer volume

 Buyer switching costs relative to firm switching costs

 Buyer information
 Ability to backward integrate

 Substitute products

 Pull-through

Price Sensitivity

 Price / total purchases

 Product differences

 Brand identity

 Impact on quality / performance

 Buyers profits

 Decision makers' incentives

Rivalry Determinants

 Industry growth

 Fixed (or storage) costs/value added

 Intermittent over capacity

 Product differences

 Brand identity

 Switching costs

 Concentration and balance

  Informational over complexity

 Diversity of competitors

 Corporate stakes

 Exit barriers

Determinants of Substitution Threats

 Relative price performance of substitutes

 Switching costs

 Buyer propensity to substitute

3.3) Porter’s Generic Strategies.

Purpose
The purpose of this study is to examine the relationship between business ‐level strategy and
organizational performance and to test the applicability of Porter's generic strategies in
explaining differences in the performance of organizations.

Design/methodology/approach

The study was focused on manufacturing firms in the UK belonging to the electrical and
mechanical engineering sectors. Data were collected through a postal survey using the
survey instrument from 124 organizations and the respondents were all at CEO level. Both
objective and subjective measures were used to assess performance. Non ‐response bias was
assessed statistically and it was not found to be a major problem affecting this study.
Appropriate measures were taken to ensure that common method variance (CMV) does not
affect the results of this study. Statistical tests indicated that CMV problem does not affect
the results of this study.
Findings

The results of this study indicate that firms adopting one of the strategies, namely cost ‐
leadership or differentiation, perform better than “stuck ‐in ‐the ‐middle” firms which do not
have a dominant strategic orientation. The integrated strategy group has lower performance
compared with cost ‐leaders and differentiators in terms of financial performance measures.
This provides support for Porter's view that combination strategies are unlikely to be
effective in organizations. However, the cost ‐leadership and differentiation strategies were
not strongly correlated with the financial performance measures indicating the limitations of
Porter's generic strategies in explaining performance heterogeneity in organizations.

Originality/value

This study makes an important contribution to the literature by identifying some of the gaps
in the literature through a systematic literature review and addressing those gaps.

4. Company Analysis

4.1) SWOT

A. Strength
Indian manufacturing industry’s current growth rate of 7 per cent and its
paltry 17 per cent share of the GDP, has the unquestionable potential to be
a world manufacturing power. As per UNIDO‟s new report titled „Yearbook of Industrial
Statistics 2010‟, India has emerged as one of the world‟s top 10countries in industrial
production, while as per the report „2010 Global Manufacturing Competitiveness Index‟, by
Deloitte Touché Tohmatsu and the US Council on Competitiveness, India has ranked second for
its manufacturing competence. The strengths of the manufacturing industry are its relative
stability, labor cost advantage, skilled work-force, rich sources of natural resources, and
democratic regime. Although the demand for manufacturing tends to fluctuate with the ups and
downs of the economy, it is characterized by regular periods of recovery following any
downturns. Moreover, manufacturing has become highly efficient over the last century, with the
ability to maximize both the productivity of the workers and machines to maximize profits.
B. Weaknesses
Infrastructure inefficiencies, severe shortage of skilled labor, high transaction cost and
procedural delays are the key issues that are eroding the competitive advantage of the
manufacturing sector in India. Lack of awareness of global technologies, and trends in
Manufacturing IT has also contributed to this low adoption. Another weakness is that it is a
mature industry. This means that there is heavy competition and little room for growth. As a
result, the manufacturing industry can be a cash cow for those who are already in it but may be
unattractive to new entrants. Productivity of the manufacturing industry in India is
approximately 1/5th of the productivity in the manufacturing industry of United States of
America. It is about ½ as compared to the productivity levels in South Korea as well as Taiwan.
Labor productivity has escalated only to a small extent in case of India in comparison to United
States of America, on the contrary, labor productivity has increased manifold in countries like
Taiwan and Korea.
C. Opportunities
India is increasingly getting recognized for high value goods requiring a fair amount
of engineering precision and quality. No wonder then that the export opportunity of
industries such as auto components (US $ 25 billion by 2015), and textile (US $ 50 billion
by 2010) is mind boggling.
India is considered good in complex assembly of products and value based manufacturing.
The manufacturing industry in India, has all the qualities which enhance economic development,
increase the productivity of the manufacturing industry and face competition from the global
markets. The Manufacturing industry in India is believed to have the potential of improving the
economic condition of India.
Opportunities in the manufacturing industry are in the technology and bio-technology areas.
These are growing market segments with higher profit margins
D. Threats
Higher input costs for the Indian manufacturing sector as a result of cascading effect of indirect
taxes on selling prices of commodities,
Higher cost of utilities like power, railway transport, water
Higher cost of finance and high transactions costs puts the sector at severe disadvantage as
compared to its Asian counterparts.
Tough competition from imports and MNCs in the domestic market or as new entrants in the
global market.

4.3) Value Chain Analysis

Value Chain - Primary Activities
Primary activities are those activities, directly involved in the conversion process of basic raw
materials into final output/products including the receipt of basic raw materials from suppliers
and marketing of output/ products to customers. They are grouped into two types of activities
related to product and market. Product related activities are the activities, performed by the
organization to add value to the product and services itself. Market related activities are the
activities, performed by the organization to transfer the finished product or services to the
customers.
Inbound Logistics
These include receiving the basic raw materials required for the steel making process, stacking
and reclaiming the materials, and distribution of materials to various departments etc. Inbound
Logistics activities can be included to primary activities.
Operations/Production Management
These include raw material handling and processing (receiving and handling of major raw
materials like coking coal, iron ore, fluxes, boiler coal etc., crushing, lump ore crushing and
screening); making of coke, sinter, lime and calcined dolomite, pitch bonded magnesia bricks;
production of iron, steel, wire rods, TMT bars, rounds, squares, structurals (angles, channels and
beams); blooms, billets etc. and preparation and repair of rolls.
Generation of air, steam, electricity, gaseous oxygen, gaseous nitrogen, gaseous argon, liquid
oxygen, liquid nitrogen, liquid argon, plant air, dry air, chilled water etc.
International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 4, December
2015.
Generation of crude coke oven gas, BF gas, granulated slag; making ammonium sulphate, crude
tar, crude benzol, and cleaned coke oven gas etc.
Manufacturing of spares and components to meet the plant requirements; carrying out the major
repairs of equipment in plant units; vibration and condition monitoring of equipment; repair of
electrical and electronics equipment (control panels, electrical meters, PLCs etc.) etc.
Planning and monitoring production, equipment design support by plant design.
Operation/Production Management activities can be included to primary activities.

Outbound Logistics
These include planning and despatch, distribution management, transportation, warehousing, and
order fulfilment. Outbound Logistics activities can be included to primary activities.
Marketing and Sales
These include product management; price management; placement (distribution) management;
promotion management; domestic sales (project sales, actual user sales, retail sales); export
sales;
sale of special steels; by products sales; planning and despatch; pricing and policy; contracts;
customer relations management etc. Marketing and Sales activities can be included to primary
activities.
Service after sales
These include commercial terms; quality aspects; delivery aspects; pre/post sales contact;
complaint settlement procedure. Service after sales activities can be included to primary
activities.