A PROJECT REPORT OF POM SUBJECT

Presented to the
Prof. Sandip Trada
Tolani Institute of Management Studies

On
02nd April, 2010

By
Group number: 4
Division B
Batch 2009-2011

Roll Student
no. name
73 Chirag
padaliya
80 Rajkumar
patel
87 Chetan
pujara
108 Milan
Thacker
Production Operation Management | TOLANI INSTITUTE OF MANAGEMENT 1
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 115 Pintu
Vaishnav
117 Anil Vekriya

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 PREFACE

As per the rules of the TOLANI INSTITUTE OF MANAGEMENT

STUDIES (TIMS) in the syllabus of PGDM Semester – 2 each group of six
students has to visit an industry. The aim of the visit is to get some
practical knowledge of the management fairs.

We have completed our project at MATRIX CERAMIC LIMITED

situated at Morvi city. In this report we tried our level best to
accommodate all types of the information, which we gathered during our
project in MATRIC CERAMIC LIMITED.

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 DECLARATION

We undersign members of group number 4 are students of PGDM

semester - 2, at TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR;
hereby declare that project report is our original endeavor that the work
being supervises by MR. Sandip Trada assistant professor of TOLANI
INSTITUTE OF MANAGEMENT STUDIES.

Thus, the appropriate data and the required information’s were

produced from the companies under study; therefore, acknowledge that
the project has not been in any case submitted to any other institute of
higher learning for any degree or diploma.

DATE: -

SIGNATURE: -

Roll Student Signa

no. name ture
73 Chirag
padaliya
80 Rajkumar
patel
87 Chetan
pujara
108 Milan
Thacker
115 Pintu
Vaishnav
117 Anil Vekriya

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 ACKNOWLEDGEMENT

We wish to express our gratitude to management of MATRIX

CERAMIC LIMITED for giving us an opportunity to be a part of their esteem
organization and enhance our knowledge by granting permission to do
our project under their guidance.

We are grateful to Mr. Kishore Patel (Chairman), Mr. Satish Patel

(Production department), Mr. Raju Patel (Administration department) and
all the employees of Matrix ceramic limited who guided us and provided
their valuable guidance and cooperation during the course of the project.
They provided us all the information and support whenever needed that
has been instrumental in completion of this project.

Last but not the least we are grateful to all the staff members of
Matrix ceramic limited, for their kind cooperation and help during the
course of our project.

We are also thankful to Mr. Sandip Trada who helped us as and when
required with his guidance.

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 INTRODUCTION TO CERAMIC INDUSTRY

Ceramic Industry in India is about 100 years old. It comprises

ceramic tiles, sanitary ware and crockery items. Ceramic products are
manufactured both in the large and small-scale sector with wide variation
in type, size, quality and standard. India ranks 7th in the world in term of
production of ceramic tiles and produced 200 million sq. meters of
ceramic tiles, out of a global production of 6400 million sq. meters during
recent year. State-of-the-art ceramic goods are being manufactured in
the country and the technology adopted by the Indian ceramic Industry is
of international standard.

There are, at present, 16 units in the organized sector with an

installed capacity of 21 lakh MT. It accounts for about 2.5% of world
ceramic tile production Ceramic tiles industry has been growing at about
12% per annum. In India, per capita consumption of ceramic tile is 0.15
sq. mtr. per annum compared with 2 sq. mtr. per annum in China and 5-6
sq. mtr. Per annum in European countries. With the growth in the housing
sector the demand of ceramic is expected to increase. Indian tiles are
competitive in the international market. These are exported to East and
West Asian countries. The exports during last year were about Rs. 180
corer.

Sanitary ware is manufactured both in the large and small sector

with variations in type, range, quality and standard. At present there are
7 units with capacity of 86,500 tons per annum and, there are about 200
plants with a capacity of 50,000 tons per annum in small scale sector. The
industry has a turnover of Rs 400-500 crore. This industry has been
growing at the rate of about 5% per annum during the last 2 years. There
is significant export potential for sanitary ware. These are presently being
exported to East and West Asia, Africa, Europe and Canada. The exports
were of the order of Rs.60 crore during current year.

Pottery ware signifying crockery and tableware are produced both in

the large scale and small-scale sector. There are 16 units in the organized
sector with a total installed capacity of 43,000 tons per annum. In the
small-scale sector, there are about 1200 plants with a capacity of 3 lakh
tons per annum. Majority of the production of ceramics tableware is of
bone china and stoneware. This industry in India is highly labor intensive
while in USA, UK, Japan and other countries there is full automation.
Quality of finished products, design and shapes in India are still below

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international standards. Equipment is old and need to be updated to meet
international standard. The export of pottery ware during 2003-04 was of
the order of Rs. 85 corer. Ceramic tiles, ceramic wall tiles, ceramic floor
tiles, ceramic glazed tiles and ceramic sanitary wares are manufacture
and supply by Matrix Ceramic Industry in UK, USA, and India and all over
world from last 5 years.

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 INTRODUCTION TO CERAMIC TILE INDUSTRY

Wall Tiles
Ornamenting walls with the most stunning and fashionable wall tiles
is the latest buzz. Tiles with diverse shapes, sizes and designs are at
every nook and corner of the home décor coliseum to make your home
look vivacious and lively. Offered at the finest prices the wall tiles
rejuvenate your space with style and give it a fresh look.

Floor Tiles
Standing tall in the tiling arena, floor tiles are complete scene
stealers. Decorating the flooring with the finest possible designs of
ceramic, marble, glass, porcelain, granite and other form of tiles makes it
absolutely breathe taking. Mind blowing floor tile designs and colors add
to the beauty of the place and puts an 'A star' on its glamour quotient.

Vitrified Tiles
Hard core and strong vitrified tiles is an absolute choice as sturdy
tiles for homes and offices. Proving superior to marble and granite tiles,
these stain resistant tiles are scratch proof and demand low maintenance
cost. Well-polished, these long lasting tiles offer good quality, attractive
looks and thus are owner's pride.

Sanitary Ware
Adorning the bathrooms and special rooms with the most elegant
and stylish sanitary ware is the latest cult. With vibrant and eye catching
colors, the bathroom decorations make the space a visual treat and raise
its glamour quotient. Fashionable sanitary ware in the finest designs gets
a thumbs-up from designers and style gurus! More types are offer by us.
In home improvement project, tiles are plays a very vital role and its
necessary to choose best ceramic tile as per condition and budget.

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 CERAMIC TILE INDUSTRY IN INDIA

In India, Ceramic tile industry emerged in the late 1950s. Ceramic

Tile Industry can be classified into three categories namely wall tile
segment, floor tile segment and vitrified and porcelain tile segment. In
India the floor tiles segment is growing at a faster rate. The market for
the wall tiles is rising at a relatively slower pace and this has resulted in
high excess capacity in the wall tile segment. The entry of two new
product categories Vitrified tiles and Porcelain tiles has increased the size
of the market considerably. It is expected that these products will
gradually take away the market from the conventional ceramic tiles (wall
and floor). As far as manufacturing of ceramic tiles is concerned, both the
organized and unorganized sector s play a very important role in India.

Like developed markets the financial institutions (both foreign and

domestic) are beginning to show interest in the sector. Various foreign
Real Estate and Finance companies like GE Commercial Finance, Tishman
Speyer, Ascendas and Farallon Capital have entered the Indian market.

The Ceramic Tile Industry drives its demand from the Real Estate
and Construction sector. Ceramic tiles find its maximum usage in
residential and commercial buildings and are also finding acceptance in
other construction projects as well like airports, bus terminals etc. as they
are found more suitable at places where there is more human traffic. In
India the construction sector is expected to do well in future mainly due
to fiscal incentives given to infrastructure development.

India is the prime destination for the IT services outsourcing. In the

coming five years at least 55 million sq.mt of extra office space must be
completed in the premium office space alone. Investment commission
report states that the retail sales were $206 billion in 2004 and is
expected to grow three-fold in the next 10 years from $206 billion to
about $660 billion by 2015. Organized retail was only $6.4 billion and is
expected to grow rapidly to reach $100 billion by 2015. Further India is
expected to be among the top 5 retail markets in the world in 10 years.
The Ceramic tiles particularly the vitrified tiles are finding increasing
usage in both these sectors and the sector would benefit from an upsurge
in these areas as well.

Indian economy is poised to grow at 7-8 percent and with growing

incomes and urbanization, demand for houses is slated for growth. The
increasing focus on rural areas, by government and corporates, the
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demand for housing would also increase in rural areas. The ceramic
industry will also benefit from the above developments. Increasing
demand is just one part of the story the availability of Finance is the other
part. With the availability of loans at low interest rate and tax incentives
have enabled the people to buy houses and build up their own
establishment. With the increasing competition amongst both Banks and
Housing Finance Companies the people are avail of getting better
financing options and that too at a cheaper rate. This would further
increase the demand for tiles. Another important driver is the distribution
network of a ceramic tile manufacturing company. The distribution
network is critical to success in this industry.

SWOT ANALYSIS OF CERAMIC TILE INDUSTRY

Strengths
• Consistent growth of 12-15 percent in spite of slowdown in economy.
• The Indian ceramic export market is rising at the rate of 15 percent per
annum.

Weakness
• Not much importance given on brand building and network thus
creating hindrance for export growth.
• Low per capita consumption (0.15 sq.mt. p.a.) as compared to
developed nations.

Opportunities
• The construction and Housing Boom to provide bolstering demand for
ceramic tiles.
• The untapped rural market supported by a strong growth witnessed by
Indian Agriculture provides tremendous potential for the domestic
ceramic manufacturers.

Threats
• Freight, supply of power and gas remains the key cost-related issues
impacting the industry.

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• Basic Customs Duty on import of ceramic tiles from China and raw
materials imported from abroad should be corrected to prevent dumping
of tiles from China.

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 INTRODUCTION TO MATRIX CERAMIC LIMITED
Matrix ceramic limited is ISO 9001 certified company situated at
Morvi city. It is engage with production of floor tiles, its new plant Atom
ceramic limited is under construction for production of wall tiles.

The world of Matrix Ceramic, pioneers and one of the largest selling
designer tiles Company. In the following images you will be introduced to
the latest collection of the rarest, most unconventional and imaginative
designer tiles you'd have ever set up your eyes on.

"The first among the equals" brand that rolls out through the state-of-the-
art Italian machines which are operated under the supervision of Italian
technology team.

Facilities of Matrix ceramic Limited:

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 PRODUCTION PROCESS
Raw material
inventory

Boll Mill

Spray Dryer

Press

Dryer line
lineLine Glaze Dept.

Glaze Line

Killen

Sorting

Packing

Tiles
inventory
Production Operation Management | TOLANI INSTITUTE OF MANAGEMENT 13
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RAW MATERIAL:
• Requirement of raw materials except Chemicals are fixed in
proportion, but quantity of chemicals depends upon quality of Clay.
• Average lot size of clay is 20 tons, a capacity of one truck.

Sr. Raw Daily

No. material requirement (In
ton)
1 Morvi clay 87
2 Kachchh 57
clay
3 Bikaner 12
clay
4 Chemicals 6
5 Water Up to 170

BOLL MILL:
• Here various sizes of bolls are in boll mill, so during the rotation of
tank, mixture of clays grinded by bigger size balls and uniformed by
smaller size balls.
• Resultant uniformed mixture is directly entered into spray dryer.
• Boll mill has batch process of 20 tons/2hr.

SPRAY DRYER:
• Grinding (Uniform powder) of lignite is used as a fuel of spray dryer.
• Lignite is responsible for problem of carbon dust in tiles.
(Disadvantage)
Production Operation Management | TOLANI INSTITUTE OF MANAGEMENT 14
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 • In spray dryer, mixture of various clay flows from up to down & dry
air flows from down to up, so as a result mixture of clay become dry
or moisture free.
• Desired temperature for production of floor tiles is 200 C.
• Capacity of spray dryer is 180 tons/day.

PRESS:
• It is a simple molding machine for mold tiles from dry clays.
• Capacity of press is 1400 HP, instead of standard requirement of 200
HP.
• Press has minimum 6 and maximum 14 strokes per minute.
• Stroke means one up & down movement of press mold.
• Length of mold is 1500 mm; within this tile size is adjusted.
• There are 2 major criteria for adjustment of press stroke:
o Thickness of tiles.
o Corner brittleness.

DRYER LINE:

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 • Raw tiles after pressing directly enter into dryer line.
• Temperature of dryer line is 100 C. (Boiling point of Water)
• Desired length of dryer line for wall tiles is 40 meter. (Half of Killen
length)
• Natural gas is used to maintain or achieve temperature in dryer.
• On an average 1 tile spend 26 minutes in dryer.

GLAZE DEPARTMENT:
• This department prepares color mixture for background printing on
tiles.
• Color chemical quantity will vary with quality of dried raw materials.

GLAZE LINE:
• It is an assembly line during where, prepared glaze color applied on
glaze.
• Here company has maximum 3 workstations in glaze line for
maximum 3 colors printing.
• There are 2 types of color printing:
o Background printing.
o Design printing.

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KILLEN:
• Length of Killen is 90 meters.
• Temperature of Killen is 1170 C, maintain by natural gas.
• Killen is divided in 3 zones.

SORTING:
• Finally tiles are divided in 4 different grades.
• First, second, third and Reject grades in the ration of 80, 12, 06, and
02.
• Tiles are graded on following most common problems:
o Carbon dust
o Glaze dust
o Improper printing
o Crack in body
o +- dimension
o +- size (1 mm)

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PACKAGING:
• Different color boxes are used for different grade tiles.
• Each box contains 10 tiles or 10 feet2.

STORAGE OR WAREHOUSE:

• Entry & exit of raw materials has separate path for movement of
finish goods.
• First red arrow shows entry direction & Second arrow shows exit of
direction.
• Here first class goods occupy almost 50% of total warehouse area,
because production of first class goods is also 80% of total
production.

PRODUCTION SCHEDULE:
• Two days prior planning.
• Production will continuously run for 24 hours in 3 shifts.
• If production is stopped, it almost takes gas of 5 lakh rupees to
achieve 1170 C.

LABORS:
• All are on contract basis.
• Multi skill workers.
• All are on rotation base work.

SAFETY EQUIPMENT:
• Hard hat cap
• Ear protection
• Safety gloves
• Back belt

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 PRODUCTION PLANT LAYOUT

• Production plant is designed in such way that, company can

minimize material handling cost & waste of raw materials.

BENEFITS OF LOCATION
• Favorable labor climate:
o Labors are Cheap & disciplined.
• Proximity to market:
o Morvi emerges as a ceramic hub. So buyers come at Morvi to
purchase Tiles.
• Quality of life:
o Morvi has very good facilities regarding Bank (Almost all
nationalized bank as well as Private also), Hospital
(Multispecialty hospitals), Education institutes.
• Proximity to resources:
o Clay of Morvi, Kachchh is almost nearby Morvi.
o Almost all type of consultancy services has been situated in
Morvi.
• Transportation facility:
o Kandla & Mundra ports have been distance within 200 km.
o Morvi is directly link with National Highway -8.B.

PRODUCTION PLANT LAYOUT

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• Core processes:-
o Order fulfillment process:
 Here company focus on the planning of production
schedule of various varieties of tiles.
 Company schedule the production in such a way that
minimize set up cost as well as time.
o Customer relationship process:
 Company focus on time delivery of tiles.
 Company scheduling its production to ready goods one
day prior than promised date.
 Company has very strict policy regarding credit time of
customer.
o Supplier relationship process:
 Company also make on time payments to their suppliers.
 If company found some quality related problems of raw
materials, company change its supplier quickly. (Minimum
switching cost)

• Supportive processes:-
o Raising fund:
 Company raises funds from its owner only.
o Recruitment:
 Company has not defined recruitment system.
o Welfare of workers:
 Company provides one time health checkup in one month
for their workers & Employees.
o Logistic activities:
 Generally, transport of goods has been carried out by its
suppliers & customers.

CAPACITY UTILIZATION
• Company has a capacity of producing 6000 boxes / day.
• Right now company produces 5000 boxes / day.
• So capacity utilization of company is approximately 83% (5000 /
6000).

RESOURCED FLEXIBILITY
• Here workers are working in their respective department only.
• Company cannot be changed worker to other department because
special skill is required for particular department.

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• Workers can be adjusted within department in different work
stations.
FIXED AUTOMATION
• Here manufacturing process is able to produce only one type of
product (Floor tiles), so it has fixed automation.

MANUFACTURING PROCESS STRUCTURE

• Structure of manufacturing process is continuous line flow, because
output of one station is input of other workstation.
• Manufacturing process has been carried out in 24 hr. & 360 days in a
year, because huge cost is incurred to achieve 1170 C in Killen.

PRODUCTION STRATEGY
• Company has been follow 2 types of production strategy:
o Make to stock:
 Somany ceramic Ltd. Is only major client of our company,
Somany almost sells 60% of total production of Matrix.
 Matrix daily send its inventory report to somany, then
Somany gives an order based on its inventory report.
o Assemble to order:
 Matrix produces tiles from 60 tons of materials, while its
spray dryer capacity is almost double than it, so sometime
Matrix sell raw materials to other ceramic company on the
base of order.

SELLING STRATEGY
• Company use push strategy, it produce popular varieties of tiles,
Company has not been focus on some innovative design of tiles.

PARETO CHART

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 10
9
8
7
6
5
Defects
4
3
2
1
0
Glaze dust Carbon dust Dimention Size

120
100
80
60 Defects
40
20
0
Glaze dust Carbon Dimention Size
dust

• By use of Pareto chart, we can say that if company removes Glaze

dust & Carbon dust error, Company is able to improve quality by
75%.
• But practically, Company can minimize its defects, it is impossible to
remove Glaze & Carbon defects completely.

CAUSE AND EFFECT

COMPETATIVE PRIORITIES & CAPABILITIES

Sr. Capabili Priorities
No. ty
1 Cost Low cost
leadership
Production Operation Management | TOLANI INSTITUTE OF MANAGEMENT 22
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 2 Quality Consistent
quality
3 Time On time
delivery
4 Flexibilit Variety
y

• Company focus on low cost leadership, by reducing unnecessary

expense of company.
• Company try to maintain its quality, so company replace its all
moving parts of plane after every 3 years. (Preventive cost)
• Morvi has not linked with rail track, so most of transportation
activities have been done by Road, still company try to deliver goods
at promised date.
• Company has around 10 types of different varieties and 45 types of
designs for floor tiles.

BOTTELENECK
• Here bottlenecks are Press, Dryer line & Killen because it constrains
production. (Spray dryer & Boll mill have more capacity)
• Company has to order Press, Dryer & Killen from only one Supplier
Company because it is interrelated with each other.
• Company cannot increase production by simply increasing capacity
of any one from them; company must have to change all these
equipments.

INVENTORY MANAGEMENT
(Figures are in ton)
Sr. Raw Daily Safety Lot Cycle
No. material consumption stock size inventory
1 Morvi clay 87 20 20 10
2 Kachchh 57 160 20 10
clay
3 Bikaner 12 120 20 10
clay
4 Chemicals 6 10 20 10
5 Water Up to 170 NA NA NA

• Here suppliers of chemical are available in Morvi, so lot size is not

fixed.
• Safety stock of Morvi clay is very less, because it is very easily
accessible.
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• Company has been very conscious to maintain safety stock of
Bikaner clay, because lead time of this clay is almost 1 week to 10
days.
• Here lot size is depend upon capacity of truck, generally is has
capacity of 20 tons.
• Cycle inventory is half of lot size.

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