Fundamental Analysis - Customer Service

The very important point for any Organization is customer service. In India Private sector banks, grown more are mainly based upon Public sector Banks. To that level, the customer service of those    banks are performing. In the same manner private sector Telephone( Also Cell phone ) Companies growth are also mainly based upon our B.S.N.L. Even today some State / Central Government based organizations are still asking what is Customer service ? To open a bank account or to avail a New Mobile phone connection , we usually go where the customer service is satisfactory. Like us, many people if approaching that company the business develops, for the said company. Gains may increase. So that the stock prices we are holding may also increase. Those Organizations keen and interested in customer satisfaction and service may perform much better for Long term investment. So, draw special attention to the companies stock purchased how performing regarding customer care.          

                  

An Organization, considering the best as customer service may definitely treat the stock investors also in the same manner is definite. In Industrial sectors, since the competitors are increasing, no doubt the customer service entirely differs the Organization to other is the Truth.

Fundamental Analysis - Human Resources Management

Organizational Psychology holds that successful organizations do not owe their success solely to market realities and sustainable competitive advantages. Actually, there is a lot more. Successful companies are those that consider their human capital as their most important asset. Facts and figures are the quantitative elements of successful management, yet the qualitative, i.e. the cognitive aspects, are those that actually make or break an organization.

Human Resources Management (HRM) is the strategic management of the employees, who individually and collectively contribute to the achievement of the strategic objectives of the organization. Assuming that the employees of an organization are individuals with own mental maps and perceptions, own goals and own personalities and as such they cannot be perceived as a whole, HRM holds that the organization should be able to employ both individual and group psychology in order to commit employees to the achievement of organizational goals.

Aiming to enable the organization to achieve its strategic goals by attracting, retaining and developing employees, HRM functions as the link between the organization and the employees. A company should first become aware of the needs of its employees, and at a later stage, understand and evaluate these needs in order to make its employees perceive their job as a part of their personal life, and not as a routine obligation. To that end, HRM is very crucial for the whole function of an organization because it assists the organization to create loyal employees, who are ready to offer their best.

The HRM activities in modern organizations are typically performed in communication with the General Management in an effort to provide a variety of views when a decision must be taken. In that way, decision making is not subject to the individual perceptions of the HR or the General Manager, but it becomes the outcome of strategic consensus.

The main goals / responsibilities of HRM are:

• To retain low employee turnover rate by inspiring people to work for the company

• To attract new employees

• To contribute to employee development

To achieve these goals, Human Resources Management trains and motivates the employees by communicating ethical policies and socially responsible behavior to them. In doing so, it plays a significant role in clarifying the organization's problems and providing solutions, while making employees working more efficiently.

On the other hand, challenges do not cease for the HRM. Modern organizations can survive in the dynamic, competitive environment of today only if they capitalize on the full potential of each employee. Unfortunately, many companies have not understood the importance of the human capital in successful operations. The recruitment and selection of the best employees is a very difficult obligation. Even companies that are voted in the top-ten places to work at, often endure long periods of hard work to realize that human element is all an organization should care about.

New challenges arise even now for the organization, and it is certain that new challenges will never cease to emerge. Therefore, the use of proper Human Resources techniques is a really powerful way for organizations to overcome these challenges, and to improve not only their quantitative goals but also their organizational culture, and their qualitative, cognitive aspects.

Fundamental Analysis - Industry Regions

INDUSTRY FUNCTIONING REGIONS / COUNTRIES :-                      

Today’s Indian Economy is globalized. Our I.T. Companies are doing business Worldwide. Apart from local ( India ) International business are many times more. Due to the percentage of income being more from Foreign countries, the Economy in these countries may affect these Organizations also.  

                              

FOR EXAMPLE : CEMENT INDUSTRY -

Responsible for 7-8 percent of global cement production, India is the second largest cement market in the world, and also an exporter to 30 countries. The cement industry in India is divided into five geographical segments, wherein the North and South regions are the leading suppliers of cement. The East, West and Central regions face deficit of cement, thereby relying on purchases from the North and South. According to the Cement Manufacturers’ Association (CMA), there are 139 large cement plants and 365 mini and white cement plants in the country.

Overview

According to the Cement Manufacturers Association (CMA), cement sales for May 2012 were registered at 16.26 million tonnes (MT), which signifies a 14 percent growth over the same period in 2011. Although India is one of the largest cement markets in the world, its per capita consumption is only around 170 kg, much lower than the global average consumption of about 430 kg. According to the latest report from the working group on the industry for the 12th five-year Plan (2012-17), India would require overall cement capacity of around 480 million tonnes. This would mean the industry will have to add another 150 million tonnes of capacity during the period.

Leading players in this sector (by market share) are Shree Chem, Ultratech, Ambuja, Binani, ACC, India Cem, Dalmia Cem, Madras Cem, Lafarge, and OCL India.

Factors that will drive growth in this sector

·   Housing segment growth is leading to higher demand for cement for

homebuilding.

·   Government’s 12th Five Year Plan focuses on increasing infrastructure

(upgraded airports, ports, railway expansion, etc.) to drive construction activity.

·   Rise in commercial and retail spaces, along with hotels in near future, will

account for increased demand for cement.

·   Use of alternate fuels will help reduce low production costs and emissions and

further drive this sector.

·   There is an increase in the sale of blended varieties of cement - Portland

Pozzolana Cement (PPC) and Portland Blast Furnace Slag Cement (PBFC)

Road ahead

Though cement is the most preferred construction material in both housing and industrial works, its demand is directly linked to the development and growth of others industry domains, such as construction, infrastructure, finance, etc. The housing segment that accounts for a major portion of domestic demand for cement in India is expected to witness a demand of 4.3 million housing units between 2010 and 2014. Government initiatives to boost infrastructure development and ease transportation costs should keep the demand for cement on a consistent rise. Furthermore, there are unexplored markets in the country, like the under-supplied North-east region, that are currently experiencing increasing demand for cement.

SURROUNDING ATMOSPHERE :-

         

Today each and every Organization must obey the Surrounding atmosphere. Otherwise, the anger from Government or from general pubic, must be definitely faced. Due to those actions the industry      must suffer more. For example, Leather and Textile based industries. According to the Instructions of Law the Tirupur, textile industry suffered much more. Similarly the Tannery based business suffered, more several years back. Very recently “Sterlite Industries” of Tuticorin was directed by the Court order a closure. Finally the stock you ought to purchase must be Eco-friendly or else not creating much damage to the Surrounding atmosphere.

Fundamental Analysis - Others

NECESSITY OF PRODUCTS :-

The stocks you ought to buy, organizations are producing what type   of products must be monitored. Daily usages such as Milk,    Electricity, Medias, Transport, Roadways, are involved (or) Grandeur           products such as Cars, Electronic goods, must be noticed. Value investing people only consider daily needs purposes stocks. They    may be even safe. Moreover the cash flow of those companies, will      be continuously good. Grandeur products manufacturing companies           sales may be Ups and Downs based on the Economy, and the years respective Budgets.  

TECHNOLOGY :-

India’s economy is undergoing extensive modernization. The country wants to privatize existing state-owned enterprises and the emerging private sector is becoming increasingly competitive in national and international markets. Introducing modern automation and control systems is a key stage in this modernization process, since such systems form the core of any modern industrial plant.

RESULTS ACHIEVED SO FAR

The modernized companies are achieving higher productivity, while workers, students and lecturers alike are acquiring new skills. They are learning to apply modern control and regulation technology. The development partner, Siemens, is also identifying new markets for its automation technology, as an important pre-condition for demand is that the workers in the enterprises in India are able to operate modern plants.

Marketing Capabilities :-

Iron & Steel

Indian Steelmakers Metal Bulletin Research (MBR) has undertaken an in-depth review of the Indian Steel Industry and its outlook over the next six years. The Indian Steel Industry: Market projections and company strategies out to 2015 offers over 300 pages of independent research and analysis including: §                  The independent and unrivalled view of MBR on the demand, supply and pricing prospects of the Indian steel and raw materials industry; §                  Critical raw materials scenario; §                  Detailed strategic recommendations on competitive strategies to be adopted by Indian steelmakers and those looking to invest in India, for sustainable and profitable growth; §                  Unique and in-depth insights into the Indian steel market and company strategies by MBR consultants and experts, in tandem with Satyabir Bhattacharyya, the former Director - Corporate Strategy and Business Excellence in Ispat Industries Limited; §                  The Indian CEO – a simple point plan in re-defining the role and leadership style required to successfully meet the domestic and global challenges ahead. The Indian Steel industry: Market projections and company strategies out to 2015 is the first report of its kind to provide independent and on-the-ground research combined with strategic recommendations. This report comes amid a challenging economic climate directly impacting those looking to invest, or already operating, in steel today. The Indian Steel Industry: Market projections and company strategies out to 2015 further offers: §                  Key long-term supply-demand balances for steel and raw materials by-major product including: iron ore, DRI, pig iron, coking coal and HR coil/sheet; §                  Sales volumes and cost structures for the key steelmakers in India; §                  Key strategic insights in leading steelmakers including Tata Steel Limited, Steel Authority of India Limited (SAIL), Ispat Industries Limited, Essar Steel Limited, JSW Steel Limited among others §                  Consumption drivers of the end-user industry segments including: construction, automotive, roads, ports, airports, railways and power; §                  Government policies on steel and minerals and how these will affect the industry structure and prices over the next decade; §                  Investment strategies needed to ensure growth, profitability and sustainability uniquely for the Indian market including how to build organisational capabilities, select the appropriate steelmaking and casting technology and achieve cost efficiency; §                  How best to understand and take advantage of the Indian steel business culture.

Exports :-

·    Iron & steel are freely exportable.

·    Advance Licensing Scheme allows duty free import of raw materials for exports. Duty Entitlement Pass Book Scheme (DEPB) was introduced to facilitate exports.  Under this scheme exporters on the basis of notified entitlement rates, are granted due credits which would entitle them to import duty free goods.  The DEPB benefit on export of various categories of steel items scheme is currently applicable for steel exports.

·     Last five year’s export  of total finished steel (alloy + non alloy) is given below:-

Indian steel industry : Exports (in million tonnes)
Category	2007-08	2008-09	2009-10	2010-11	2011-12*
Total Finished Steel (alloy + non alloy)	5.08	4.44	3.25	3.64	4.04
Source: Joint Plant Committee; *provisional

Focusing Segment :-

The stocks you ought to buy, companies products are prepared for   which class of people, 

          (a)     Like I.T.C., Britannia           --  which belongs to all people,

          (b)     Or else like Oberoi Hotels  --  which belongs to High class people, 

          (c)     Or else Infosys                     --  for Local / International   Organizations. While the Economy struggles, focusing retail customers may not suffer more. The retail customers will only reduce their usage. But not totally withdraw. But Economy based customer oriented organizations suffer more. Due to these situation they   may even ( to limit the expenses ) stop certain services, totally until the Economy retains its Growth. In turn while the Economy          improves    this may also take a “U” turn.    

Fundamental Analysis - Quality of the Products

If we are ready to purchase a stock, first of all we must ascertain the quality of products manufactured is very important. On today’s date all the companies are manufacturing only qualified products.
 
The companies you mention may be either I.T.C., Britannia, Godrej, Titan, Voltas, etc…..We are purchasing and using only very few products. But mostly we are not using majority of the products by purchasing and using for our own use. To avoid this, we can enquire about those products quality and read through various available sources.
 
If the products are quality and anytime Demand persists. So that our investment may also be safe and growth occurs.
 
Manufacturing is based on finding efficiencies and removing wasteful steps that don't add value to the end product. There's no need to reduce quality with lean manufacturing – the cuts are a result of finding better, more efficient ways of accomplishing the same tasks.
 
To find the efficiencies, lean manufacturing adopts a customer-value focus, asking "What is the customer willing to pay for?" Customers want value, and they'll pay only if you can meet their needs. They shouldn't pay for defects, or for the extra cost of having large inventories. In other words, they shouldn't pay for your waste.
 
Waste is anything that doesn't add value to the end product. In Lean Manufacturing, there are eight categories of waste that you should monitor:
 
1. Overproduction – Are you producing more than consumers demand?
2. Waiting – How much lag time is there between production steps?
3. Inventory (work in progress) – Are your supply levels and work in progress inventories too 
    high?
4. Transportation – Do you move materials efficiently?
5. Over-processing – Do you work on the product too many times, or otherwise work 
     inefficiently?
6. Motion – Do people and equipment move between tasks efficiently?
7. Defects – How much time do you spend finding and fixing production mistakes?
8. Workforce – Do you use workers efficiently?
 
Lean Manufacturing Process :-
The Lean Manufacturing process has three key stages:
 
Stage 1 – Identify Waste
 
According to the Lean Manufacturing philosophy, waste always exists, and no matter how good your process is right now, it can always be better. Lean Manufacturing relies on this fundamental philosophy of continuous improvement, known as
 
Kaizen.
 
One of the key tools used to find this waste is a Value Stream Map (VSM). This shows how materials and processes flow through your organization to bring your product or service to the consumer. It looks at how actions and departments are connected, and it highlights the waste. As you analyze the VSM, you'll see the processes that add value and those that don't. You can then create a "future state" VSM that includes as few non-value-adding activities as possible.

Stage 2 – Analyze the Waste, and Find the Root Cause

For each waste you identified in the first stage, figure out what's causing it by using Root Cause Analysis. If a machine is constantly breaking down, you might think the problem is mechanical and decide to purchase a new machine. But Root Cause Analysis could show that the real problem is poorly trained operators who don't use the machine properly. Other effective tools for finding a root cause include Brainstorming and Cause and Effect Diagrams.

Stage 3 – Solve the Root Cause, and Repeat the Cycle
Using an appropriate problem-solving process, decide what you must do to fix the issue to create more efficiency.

Tools to Reduce Waste

Once you have identified wastes using the three key stages above, you can then apply this next set of tools to help you reduce waste further:

Just in Time – 

This is the core idea of Lean Manufacturing and is based on the "pull" model. To minimize stock and resources, you only purchase materials, and produce and distribute products when required. You also produce small, continuous batches of products to help production run smoothly and efficiently. By reducing batch size, you can also monitor quality and correct any defects as you go. This reduces the likelihood of quality being poor in future batches.
 
(In manufacturing, a key way of doing this is to use Kanban, below.)

Kanban – This is one of the key ways to involve people in the lean manufacturing process. Here, you support the Just In Time model by developing cues in the system to signal that you need to replace, order, or locate something. The focus is on reducing overproduction, so that you have what you need, only when you need it.

Zero Defects – This system focuses on getting the product right the first time, rather than spending extra time and money fixing poor-quality products. By using the Zero Defects system, you'll reinforce the notion that no defect is acceptable, and encourage people to do things right the first time that they do something.

Single Minute Exchange of Die (SMED) – 

This helps you build flexibility into your production. For example, in the automotive industry, it could take days to change a line to produce a different car model. With SMED, the assembly process and machinery are designed to support quick and efficient changeovers. (Here, a "die" is a tool used to shape an object or material.)

The 5S Philosophy – 

Lean Manufacturing depends on standardization. You want your tools, processes, and workplace arrangements to be as simple and as standard as possible. This creates fewer places for things to go wrong, and reduces the inventory of replacement parts that you need to hold. To accomplish a good level of standardization, use the 5S System.

Tip:
 
These techniques offer proven solutions for fixing waste within your organization. However, remember first to apply the three-stage Lean Manufacturing process, and to deal with any issues that this raises.
 
Key Points
 
Lean Manufacturing focuses on optimizing your processes and eliminating waste. This helps you cut costs and deliver what the customer wants and is willing to pay for.
 
With a lean philosophy, you enjoy the benefit of continuous improvement. So, rather than making rapid, irregular changes that are disruptive to the workplace, you make small and sustainable changes that the people who actually work with the processes, equipment, and materials will take forward.
 
This systematic and simple approach is very effective across all types of industries. What's more, ultimately, a process without waste is much more sustainable.

Apply This to Your Life

1. Overproduction – Do you provide more data or information than is needed? Do you create reports more often than required for example? Or do you spend unnecessary amounts of time formatting these reports?
2. Waiting – Do you spend too much time waiting for information or data from others, before you can do your work? What can you do about this?
3. Inventory (work in progress) – Do you have a large stock of materials? Are your supply levels and work-in-process inventory too high?
4. Transportation – Do things flow efficiently? Could you combine deliveries, or deliver things more quickly?
5. Over-processing – Do you needlessly work on something more than once?
6. Motion – How is work passed along in your team? Do people understand what they're required to do at each step? Do people and equipment move between tasks efficiently?
7. Defects – How often do you find mistakes ? Do you make the same mistakes on a regular basis? 
8. Workforce – Do you use your time wisely ? Do you spend most of your time on activities that add value and are a high priority ?