National Confectionery Co. Essay, Research Paper

NATCO

INTRODUCTION

NATCO is an acronym for the initial’s National Confectionery Co. It is a very popular brand name in England, which tries to satisfy the needs of the Asian community it is often mistaken that NATCO is the name of the company; but this is not true. NATCO is only a brand name for an international trading company, a specialist in Indian foods, -T. Choitram & Sons. T. Choitram & sons is the largest chain of supermarkets in the U.A.E., a confectionery manufacturer, a wholesaler, a cash &carry operator, and the manufacturer and packer of more than 250 products marketed and distributed in the UK under the NATCO brand.

Some of the other brands of the company are Papa – lentil and spices, Leone – tea, Koto – medicated products, Family – tissues, NATCO – sweet and biscuits. NATCO was their first and is their main brand, and NATCO sells more than any other of their brands does. This is why we also have emphasized more on the NATCO brand in our report. NATCO is called the lucky brand for the company, as they believe that this brand has led to them towards success.

Topics, which will be discussed in the report, are the management structure, their company history, manufacturing process and facilities, inventory control, quality control, just in time and forecasting. The helpful staff of NATCO kindly provided this information.

Historical Review

T.Choitram although an Indian migrated to West Africa in 1942. At the age of 17, he began his enderpreneurial career by selling seeds fruits magazines. He was a man who was always motivated with the dream to be a very successful businessman. He saw his future in the food industry and so he began his own supermarket and named it after himself. As years passed by he gained tremendous success and due to this he launched a brand name i.e. NATCO for his trading company in the year of 1968.

Company Overview

In London, T. Choitram & sons, a packaging firm has been in the competitive market of packaging and distributing foodstuff, spices, and confectionery for over 40 years. The owner of company has come a long way from a small grocery store in Sierre Lonne to one of the biggest distributor of foodstuff in London. With his unique managerial style he succeeded in bringing up his trading company to be one of the best in the world.

T. Choithram & sons is located at Wembley. The factory and warehouse together under one roof occupies around 25,000-sq. ft. in area. NATCO has employed over 150 skilled and unskilled labor, and has a staff of around 50 people, which adds up to a total of 200 people employed at NATCO. NATCOs team of highly experienced buyers is regularly traveling the Four Corners of the globe to source the best quality crop for export to their Wembley factory to be packed under the NATCO label. They guarantee premium products at the best price, ensuring that NATCO is excellent Value of money.

The NATCO brand was first launched in the UK in the early 60s, catering to the needs of the Asian communities. The extensive product range includes Spices, Lentils, Beans, Flours, Nuts, Dried Fruits, Basmati Rice, Canned Products, Butter Gee, Betel Nuts, Pappadums and much more. NATCO brand today is known for its superior quality standards. NATCO products are exported through a network of distributors to U.S.A, Canada, European Community, Middle East, and West Africa and they are continuing to develop these export markets.

Papa is the other brand name for NATCO. T. Choithram and sons came up with this other brand name because in many countries, government regulations allow only one agent for a brand for the whole country. This limits the sales in those countries. To increase the sales in these countries they planned to have more distributors. They could not introduce Papa into the other countries as a brand of T. Choithram as it would be an illegal activity. To legalize it they came up with a plan, which would help them to sell the Papa brand in the countries where NATCO already exists and it would not be illegal at the same time. They established a new company Orient Foods. Papa is a brand name for this new company and sold in outside market, which helps NATCO compete with other similar product. This move has helped the company as its sales have increased in foreign markets.

The mission statement for NATCO is we shall strive to produce the very best product and materials available, when and where they are wanted and at a price that represents good value at every stage of the trading process, from the harvest to the shelf, to the factory to the home.

Functions

The organization of NATCO is based mainly on the three function called Finance, Marketing, and Operations. Each of these functions has its own managers or directors.

FINANCE

Finance is the lifeblood of commerce and industry. The finance department of NATCO has the responsibility of ensuring that enough funds are available for the smooth operations of the organization. Mr. R.D.Rajwani, the managing director of the company, also commented on the finance department that it is concerned with budgeting activities of the other departments. He also mentioned that this department also operates the cost and budgeting control system by gathering and analyzing cost and other financial data, before the redistribution of information in the form of performance report. Mr.Rajwani also talked about the other activities dealt with this department, such as handling accounts of income and expenditure, payment of wages, pricing decision, etc. It also involves the function of banking. Banking involves depositing cash, withdrawal of cash, taking loans, discounting of bills.

MARKETING

Marketing function of NATCO comprises of number of sub-function such as publicity and advertising, sales promotion, samples and coupons, fairs and exhibitions, public relations, distribution and marketing resources. It is the function of the marketing department to advertise and price the product. The marketing department closely works with operation and production department, so that the changes could be administered from time to time as per the result of market research. The sub-functions under marketing are very essential for the business. They sub functions are explained as follows: –

1) Publicity and Advertising– Advertising has become an indispensable function in the modern business due to the competition and mass production. Publicity brings forth production to the knowledge of the consumer and helps both in creating and maintaining demand for the goods produced. It persuades people to buy goods and services again and again. It helps to create regular demand by smoothening out seasonal and other fluctuations. Without publicity, goods may not be taken note of and in the absence of demand; production of those goods may have to be stopped. It creates a good image of the company and reputation of the products. It adds to the goodwill of the enterprise.

2) Sales Promotion- Sales promotion includes all those activities, which are directed towards the promotion of sales such as organizing publicity, introductory sales. It also includes personal as well as innovative selling. Though the ultimate aim of sales is to increase sales and profit, but it is different from advertising and personal selling in approach and technique.

3) Samples and Coupons- Distribution of free samples of smaller size of the product is an effective device of sales promotion, especially to introduce a new product. Samples may be widely distributed or given only to selected customers. Customers can test the product before purchase. Premium or prizes may be given to the buyer on the purchase of some specific product e.g. one Lux toilet soap for the purchase of an economy pack of Surf. In some cases coupons are issued to prospective buyers through newspapers. Sometimes clearance sales, off-season sales, reduction.

4) Public Relations- Public relations aim at securing favorable opinion and good of the public towards the enterprise. A business enterprise price must build up a good image of its own to have better sales. It must maintain cordial relations with the clients and always look after their welfare. It must go on informing the public about the improvement in packing, the quality or the new uses of the products and influence their decision to buy the product. It must give prompt attention to their suggestions and to the redressal of their complaints. It must take note of the bias or the special prejudices of the customers and try to win over their support.

5) Fairs and Exhibitions- Business enterprises always like to participate in fairs and exhibitions to promote their sales. Some of them organize their own exhibitions of their own products. Fairs and exhibitions are held on local, regional or international level. Trade Fair Authority of India organizes various exhibitions of different kinds at various places in the country.

OPERATION

This department of NATCO consists of all the activities concerned with the production of food and services. The operation function is dependent on the finance side for its financial needs and on the marketing department for further research and development of the products. The operation function of NATCO is concerned with transformation of various inputs into desired outputs.

MANAGEMENT STRUCTURE

Manufacturing organization is usually beuracratic in structure. The word beurocratic is not used despairingly but rather in true sense, which implies division of labor into bureaus or departments. The organization structure of NATCO is a typical pyramid type structure, each post at one level subordinate to a post at a higher level. After our visit to the company we observed that each person is responsible to only one-person level, which is a sign of an organized company.

The division of labor in the company allowed the advantage of specialization to be obtained. To be precise, each person had specific and often unique task to perform. As seen in most of manufacturing firms, the labor force is divided into skilled and unskilled labor, NATCO also has this kind of mix. The labor strength existing in the company is around 150 of whom the majority is skilled. The staff employed at NATCO is about 50, which add up to 200 people working for the company.

THE ORGANIZATION CHART OF THE MANAGEMENT.

In the manufacturing firms a number of major functions are performed by a variety of personnel. These personnel have specific job and titles. It is a norm in a modern firm to specify the job, then find appropriate person to fill the post. The same strategy is used by NATCO too. The major functions and jobs of the company are as follows.

The Managing Director

At NATCO the board of directors delegates its authority to the managing director of the company. The managing director is responsible for the everyday running of the organization. At NATCO Company Mr.Rajwani is responsible directly to the board of directors for the successful achievement of the company broad objectives. It’s him who is responsible for the completion of goals and putting forward the desired objectives of the firm. Mr. Rajwani is also responsible for various other activities concerned with the delegation of the authorities to sales and marketing manager, technical/ engineering manager, financial manager, manufacturing manager and finally the personnel manager. He as a managing director is also responsible for the various activities concerned with the above managers.

Production Manager

The Production Manager of the NATCO is responsible for ensuring that the product is completed as scheduled, within the budgeted cost, and at the specified quality levels. The production manager of the NATCO. Has also direct authority over the production labor force. Reporting to him are the various supervisors. The production manager of the NATCO delegates his authority to the casting dept and various other supervisors at the lower levels.

Purchasing Manager

The purchasing manager at NATCO is concerned with not only the purchase of the raw materials but also the packing materials like-wrappers, tins, bottles etc. and is also responsible for fulfilling the needs of manufacturing departments. He is also responsible for the purchases, which in turn help in the ultimate completion of the production process.

MANUFACTURING

It is under this sector where the majority of the workforce is employed. Activities such as production engineering, production planning, production control, maintenance, quality, purchasing etc. are a part of this function.

The Manufacturing manager of the NATCO. Mr. Gurbachan is responsible to the Managing Director for the efficient operation of the Manufacturing facility. He has a large span of control i.e. a large number of the people will report to him. Under the supervision of Mr. Gurbachan will be the manager of the production dept., production control, purchasing, maintenance etc. Mr. Gurbachan said that, the main objective of NATCO s manufacturing process was to produce the right product, at right time, at a right price, and at agreed and expected quality by the NATCO customers.

Manufacturing Facilities

NATCO owns 20 machines to complete its manufacturing process. This machinery includes refining and cleaning machines, metal detector machines, electronic weighing machines and other packaging machines. These machines have been imported from Germany. As there are around thousand items that they produce and packet, and as most of the foodstuff is similar in nature, several similar items are packaged out of one machine. The machines have these some special detachable parts which are changed for every different item fed in the machine. This helps them to packet 10-15 products in different sizes from one machine.

The raw materials are imported from India, China, Bangladesh, Indonesia, Sri Lanka, Brazil and Mexico. They receive these through channels of distribution. The first step in the manufacturing process is that these raw materials are fed into refining and cleaning machines which gets rid of the dirty or unneeded particles. The next step in the manufacturing process is quality control. Quality is a very important factor, which should be always given a high priority, as the reputation of the company is affected by it. A small selection of samples at random of every item is inspected for high quality. This quality check is not only manual but also passes through a computerized quality check control. If in any case, any sample is not found to be up to the company standards then the matter is passed on to the quality control manager whose function is described latter in the report. The following step in the process is packaging. A few items go through four to five machines for this process whereas; most of the others require only two. This is because those few items require better and double packing for example, tins and bottle products have to be sealed and then tinned and bottled respectively. During this stage of the process computer weighs the food item just before it gets packaged. After this stage the sealed products go through metal detector machines, which makes sure that even a small piece of metal has not being mistakenly mixed in the product. Before these sealed packets are boxed they pass through this machine which prints the expiry date of the product. This expiry date is set with the consent of the health department before hand.

Although machines do most of the process, the manual labor is also required. The labor is required to box the small packets and then store them, and also to overlook the machines just in case anything goes wrong. The main task of the company lies in storing their huge product range. They have a twenty five thousand square feet warehouse, which has been racked till the roof. There is a strong possibility of their food getting spoilt if it is not stored properly. The food items require a cool and dry place to be stored in. The have to kept in the appropriate temperature till they are sold.

PACKAGING

Packaging and packing are concerned with the putting up of the product in bags, boxes, bottles, cans or other categories of special containers, before they are dispatched for sale. Packing of goods implies placing them in suitable packets to facilitate their easy and safe handling, to insure their quantity and quality, to protect them from any kind of damage during transit or storage and to improve their sale prospects by their attractiveness. Packing also provides additional information to the consumer about the products such as contents, price, date of manufacture, date of expiry, brand name etc. The type of packing depends upon the nature of product. Food-grains are packed in jute bags, liquids are packed in bottles or tins, and fruits are packed in cardboard or wooden boxes.

WAREHOUSING

Warehousing is very important function after packaging. It involves storage or accumulation of goods for the purpose of equalizing supplies over a period of time. Warehouses create time utility and remove the hindrance of time. A warehouse is a place used for the storage or the accumulation or preservation of goods in proper condition from the time they are produced until they are needed by the consumers. Warehouses render very useful services to the businessmen by enabling them to hold up their stocks during the dull season. In the absence of the warehouses, the merchandise would be required to dispose of their goods as and when they are brought or manufactured.

AUTOMATION AND THE MANUAL PROCESS

NATCO being a reputed company base its standards on its effective quality. It is the quality of the product that is given the importance, to achieve the ultimate standard of the company. The manufacturing process of the company is based much on the automation tecqunice rather than the manual ones. It is self evident that with the use of the automation, the cost of the labor is reduced while the value of the goods produced remain constant or increases. To improve the total productivity of the company and its quality of the product, the company made a wise decision by investing in the latest production technology. In it s the company has imported its latest German technical machinery. Natco has also purchased various kinds of machinery from U.K as well. For example vertical form of packaging bought from Sandicre U.K. as per the information of the company brought to be knowledge we can broadly say that automation helped NATCO to improve the efficiency of the company by providing the following advantages.

1.Quality: This is one of the most important aspects of the automation process. It is with the help of the automation process the quality is improved by the human errors. The views presented by the manufacturing factory manager is that people become tired by working and repetitive jobs bored; they are therefore prone to mistakes. Products produced by the manual workers also vary in the quality due to differences in the personnel skills. Once automatic equipment is set up to produce good quality products then it will repeatedly produce the same quality products. Any tendency to deviate from the standards set can be monitored and altered using the statistical quality control (SQC) technique and the process can be modified whenever required. This ultimately means that with the help of automation technique the results of the quality will remain same from time to time.

2.Production Rates: With the advantages of automation, it leads the company to increase the production rates over the manual methods. For example, before the company use to function on the man?