Human Resource Management (HRM) in Cement Industry

Human Resource Management (HRM) in Cement IndustryIn this investigate we atomic number 18 trying our best to provide a frame convey to optim every(prenominal)y hold the valuable manpower resource.1.10 internality VALUES OF LUCKY CEMENT LIMITED (2009)At palmy Cement we comprehend our core set to be the virtually signifi push asidet factor leading to the existence and growth of this prestigious organization.How we accomplish our rush is as vital as the mission itself. Thus these values be not only on paper and pen but lounge deep in the heart of each individual work or associated with lucky cementum.These values atomic number 18 reflected within the name of LUCKY itself They atomic number 18 as follows.L = LEADERSHIP We dont just innovate application practices we argon defining the way course leave be d unmatchable in the future. We are pi superstarers.U = UNDERSTANDING Whereby we understand the demands of cement industry at a global level, parallel to the needs of pe ople, associated with us in one way or the new(prenominal).C = attachedness One word that sums it all at Lucky Cement is the commitment of people to quality, relationship and most weightyly our customers, who can never be disappointed at any be.K = KONSTANT The most important element to balance any equation innovationwide, at Lucky Cement we assign the value of Konstant with unity of profits, as profits are required to sustain and grow any organization. They are in-turn the ultimate quantity of efficiency.Y = YOU This attitude is a built-in character. At lucky cement we always main(prenominal)tain, You first, Me finishing approach, not only to please but to delight our employees, shareholders, customers, and all the other people who expect a dissolving agent from Lucky Cement.Lucky Cement Ltd produces 25000 tons of cement per solar day with somewhat 4000 employees working in this industry. This industry plays an important role in a sustained frugal growth of the cou ntry.Sponsored by tumefy cognize Yunus Brothers Group one of the largest merc breakise houses of Pakistan, Lucky Cement Limited currently has the force of producing 25,000 tons per day of dry process Cement.Lucky Cement came into existence in 1996 with a daily production capacity of 4,200 tons per day, currently is an omnipotent cement plant of Pakistan, and numberd amongst the few best plants in Asia.With production facilities in Pezu (Production capacity 13,000 Tons per day) as well as in Karachi (Production capacity 12,000 tons per day), it has the tendency to live the hub of cement production in Asia (2009)Lucky Cement Limited is managed by the team of professionals, who are committed and dedicated to fulfill the mission and vision of the organization. Two production plants and five marketing offices are managed by the staff strength of then 1800 permanent employees throughout Pakistan.Production Sales Volume PerformanceDuring the class under review, our phoner achieve d all time high volume of production and gross sales as enumerated in the table downstairsA comparative analysis of sales volume of the industry vis--vis our Company is asThe analysis of the market share of Our Company is as underFinancial PerformanceA relation of the key financial settlements of Our Company for the yr ended June 30, 2008 with the same period lowest year is as underSales PerformanceDuring the year under review our company achieved an boilersuit net sales revenue growth of 35.43% as compared to same period fail year. Increase in revenue was attributed collect to both increases in volume by 19.75% and net memory board by 15.68%. Our Company continued to concentrate on more on exports because of strong establishment of its brand in various export markets with high retention margins. The domestic sales registered a negative growth of 6.38% because of higher exports made by the company which registered a growth of 116.29%. The ratio of sales revenue from expor ts was 54.43% whereas the local sales accounted for 45.57% during the financial year under review. The clean combined net retention prices per ton improved by 13.10% over the comparative period last year. The prices in the international markets remained robust whereas the prices in the domestic market were under pressure, however in the last quarter the prices started change magnitude because of substantial increase in production court coupled with duties and taxes change magnitude by the Government in federal budgetCost of SalesThe major(ip) cost of production for cement manufacturing is the get-up-and-go cost which constitutes 68.77% of the total cost of production. The energy cost is further divided into heat energy and power energy which constitutes 44.12% and 24.65% respectively of the total cost of production. As a matter of fact, the international prices of ember and oil apply increased manifold during the year under review which stupefy badly alter the cost of produc tion both in Pakistan and abroad. The international prices of coal were count only US$ 80 per ton by end of last year which has now increased to US$ 210 per ton by the year ended June 30, 2008. The prices of furnace oil have also increased tremendously which have also affected the cost of production.Except loose cement sales, the cement is packed either in paper bags or polypropylene bags. The increase in the prices of paper and the polypropylene in the international markets have also increased the cost of cement bags substantially. Similarly, the other cost factors have been increased either because of inflation, oil prices and depreciation of Pak Rupee for trade items.We are pleased to report that, our Company has taken various measures to mitigate the impact of increase in cost of production. Resultantly, the production cost per ton of our Company was only increased by 18.89%.Gross remunerationOur Company achieved a gross profit rate of 25.73% for the year ended June 30, 2008 compared to 29.35% gross profit rate achieved same period last year. However, the gross profit in term of absolute value was increased by 18.71% because of the volumetric growth.Finance CostsThe finance costs was reduced substantially from Rs.186 per ton last year to Rs.23 per ton during the year ended June 30, 2008 mainly because of interest rates hedging executed by the Company by entering into cross currency swaps agreements with the banks. These hedging transactions allowed the company to offset affirmative interest differential between KIBOR and LIBOR a dispatchst the total financing cost of the Company. On the other hand, these swaps exposed the Company to currency risk for depreciation of Pak Rupee but at the same time ever increasing exports of the Company provided a natural hedge against these swaps transactions to mitigate the currency risk.As you know the economic and political scenario of the Country started deteriorating from November 2007 resultantly the Pak Rupee lo st almost 12% of its value by June 30, 2008 as compared to June 30, 2007. due to the depreciation of Pak Rupee our Company on the one hand incurred exchange loss of Rs.800.359 gazillion on cross currency swap but on the other hand realized exchange gain of Rs.277.816 million on realization of GDR proceeds and export sales.Distribution CostsDistribution costs incurred by the Company were in-line with the increase in the volume of export sales. The percentage of distribution costs to net export sales was 12.51% for the year ended June 30, 2008 compared to 11.66% last year.Deferred TaxationDuring the year under review, the deferred tax provision amounted to Rs.456.53 million was reversed out of the total provision of Rs.1,515.54 million created in prior years due to higher ratio of local sales. Since the ratio of exports has increased which are covered under presumptive tax government activity on which no deferred tax provision is required, therefore to that extent deferred tax was reversed.Contribution to the National exchequerOur Company contributed a total amount of Rs.3.907 billion (2007 Rs.4.137 billion) to the Government Treasury in shape of taxes, levies, move duty and sales tax. In addition to that our Company earned precious foreign exchange of approximate US$ 150 million during the year under review from exports besides bringing foreign investiture of US$ 109 million against the issuance of GDRs in the international market.We briefly describe the problem at hand in the following paragraphs.1.20 The Problem DomainThis investigate work is concerned with adaptation of optimisation Techniques to employ the manpower resources in a best possible way in cement industries with point of reference to Lucky Cement Ltd, Pezu, Pakistan. In this look we are trying our best to develop a framework how to utilize the manpower resources optimally in industrial sector, especially in cement industries. Literature review reveals that no exact attempt has been made by seekers, although much relative work has been done in one or in the other form.1.30 Aims and ObjectivesThe basic objectives of the research work can be summarized as belowTo develop a questionnaire for finding decision- qualification parameters along with their weightsTo prepare a group of models that can depict the research work clearlyTo validate the Symbolic Model through test dataTo publish the results of the research work Nationally as well as InternationallySimilarly, aims of this cogitation are given as underTo prepare a standard knowledge acquisition hawkshaw for facts findingTo develop a framework that might work just give care a pedagogical device for students as well for researchersTo pinpoint the immenseness of human resource utilization, so that govt. and other organization whitethorn know the importance of this valuable resourceTo prepare a baseline for further research in this fieldTo pick at the cost of production in cement industriesTo apply the model in ot her industries1.4 ScopeThis study is limited to the application of optimisation Techniques to hands resources in cement Industries with respect to Lucky Cement Ltd, Pakistan. However, it can be applied to all cement industries in Pakistan and in the rest of the world. Test data will be chosen from the different plants of Lucky Cement Ltd, Pakistan, which is the largest cement industry in the Asia.This research work is a multidisciplinary approach, which will combine the knowledge of experts of various fields of sciences, like, Management, Economics, Operations Research/Quantitative Techniques, figurer Science, nurture clay, Decision Theory and Statistics.1.5 Justification of the directThe whole universe has been created by Almighty Allah for humanity, slice human, as depositd earlier are given the power of intelligence. So the first and foremost personal line of credit of human being is to know their importance in the world and how to utilize this most valuable resource. al l(prenominal) and every thing in the universe has some value and importance whether we have knowledge about it or not yet but men have the capability to mobilize the remaining resources of the universe. cognition people can utilize these resources in a best possible way to fulfill their unfathomable wants.Among all the inputs to any organization i.e. Management, Money, Material, Men, Machinery, Mansion, Message etc.the most important one is the Man who is responsible to fail and activate these resources economically, economicly and effectively to achieve maximum utility. That is why when managerial staff makes rational decisions refine information at the beneficial time and in upright form is required to them. Hence research is required to find out ways and means of optimum utilization of the manpower resource in the industrial sector in general and in cement industries as special.Literature ReviewManpower grooming is truly an interdisciplinary activity rooted in such diver se fields as economics, psychology, law and public administration, industrial relations, computing machine science, and operations research. National manpower be after is the full member of macro-economic planning which attempts to achieve maximum utilization of human resources in terms of societal goals (Bib09).The closest reference to the expression optimal utilization of resources is value-for-money. According to this universally-recognized concept, all business processes are characterized by the use of a group of inputs (resources), which are transformed (activities) into outputs (results). The optimization of resources is ground on three characteristics economy, effectiveness and efficiency. The economy of resources consists of getting resources of the required quality, at a reasonable cost and in a timely manner. The effectiveness of resources is aimed at ensuring the adequacy of resources relative to business needs and their appropriate use. The efficiency of resources is measured by the attainment of an organizations business objectives (Bettm).Various optimization techniques for Integrated Renewable Energy Sources have been reported in the literature like (i) Linear schedule (LP) (ii) Geometric Programming (GMP) (iii) Integer Programming (IP) (iv) Dynamic Programming (DP) (v) Stochastic Programming (St P) (vi) Quadratic Programming (QP) (vii) Separable Programming (Se P) (viii) Multi-objective Programming (MOP) (ix) Goal Programming (GP) (x) HOMER (xi) VIPOR and (xii) Hybrid 2, etc (A.K. Akella, M.P. Sharma and R.P. Saini, 2007).In the USA, for example, the Presidents Commission on National Goals issued the following list with its attendant implications for manpower needs improved alive standard, capital expansion with emphasis on transportation and utilities, urban development, social welfare, health coverage, education, transportation, national defense, research and development increases, international aid, space exploration, agriculture, ma npower retraining, area redevelopment to promote full employment in regionally depressed regions, and development of natural resources (Bib09).Boxall, Purcell, and Wright distinguish among three major subfields of human resource caution (HRM) micro HRM (MHRM), strategic HRM (SHRM), and international HRM (IHRM). Micro HRM covers the sub functions of HR policy and practice and consists of two main categories one with managing individuals and pocket-sized groups (e.g., enlisting, selection, induction, training and development, performance management, and remuneration) and the other with managing work organization and employee voice systems (including union-management relations). Strategic HRM covers the overall HR strategies adopted by business units and companies and tries to measure their impacts on performance (Mark L. Lengnick-Hall, Cynthia A. Lengnick-Hall, Leticia S. Andrade, Brian Drake, 2009).Broadly stated, manpower planning is the process to ensure that the right people are at the right place at the right time in sufficient numbers to efficiently accomplish anticipated tasks. Indeed, the field can be viewed as embracing information systems, management constituenticipation, and mathematical modeling largely represented by the disciplines of computer science, organization theory, behavioral science, and operations research (Bib09).Strategic human resource management (SHRM) focuses on adjust internally consistent human resource management (HRM) practices to build employees knowledge, skills, and abilities in an effort to support agonistic strategies and achieve business objectives. SHRM is gaining increasing importance because strategic management, in a knowledge-based economy, emphasizes that employees are considered to be a primary component for attaining a competitive advantage. SHRM is gaining increasing importance because strategic management, in a knowledge-based economy, emphasizes that employees are considered to be a primary component for at taining a competitive advantage HRM practices create procedures that institutionalize the make of employees knowledge, skills, and abilities throughout the organization to promote valued, unique, and unmanageable to imitate organizational competencies which support competitive advantage (James D. Werbel, Samuel M. DeMarie, 2005). visit scheduling techniques under human resource constraints are referenced with the objective of minimizing project duration, and a right(a) human resource parcelling algorithm standing on multi-project scheduling, with a heuristic procedure for look for out approximate optimal allocation, is adopted. A forward/backward scheduling technique is the primary allocation algorithm it evaluates maximal and minimal labor power allocations for activities (al., 2006).Analysts develop strategy for allocating limited manpower resources based on command priorities, historical utilization data, and analysis of mission and functions. Analysts should have thorough k nowledge of the Planning, Programming, Budgeting and achievement System (PPBES) documents or systems, the Structure and Manpower Allocation System (SAMAS), command plan, and TAADS for use in distributing and track approved allocations by budget program and organization (Man09).2.1 Welcome to the global village MISTheres no suspect that the world of work as we know it is rapidly changing. Even as little as xv years ago, the times were calmer than they are today.Back in 1973, with the first oil embargo, U.S. businesses began to realize the important set up that international forces had on profit and lost statements. The world was changing rapidly, with other countries making significant inroads into traditional U.S. markets. Unfortunately, U.S. business did not adapt to this changing environment as quickly or adeptly as they should have. The result was that U.S. blood linees lost out in the world markets and have had to fight much harder to get in. Only by the late 1980s done U .S businesses begin to get the message. But when they did, they aggressively began to improve production standards, centering more on quality and preparing employees for the global village (The production and marketing of goods services worldwide). It is on this last mentioned point that human resources will have the biggest effect (David A. Decenzo and Stephen P. Robbins, 2002).Computer and information Technology has converted the world into a globe and definitions of different terminologies have been changed such asMarket was outlined as a place where two parties comes and make transaction, but due to Internet, no place is required for dealing making transactions. Every thing can be made at home i.e. purchasing, selling, bank transactions etc.T. Lucey (Lucey, 1991-1992) define MIS as The combination of human computer-based resources that results in the collection, storage, retrieval, communication use of data for the purpose of efficient management of operations for busine ss planning (Lucey, 1991-1992).2.2 Problems with MISIn developing countries such as Pakistan, Different problems are faced during improvement in any field with respect to MIS. T. Lucy generalized all the problems in to half a dozen categories (Lucey, 1991-1992)Lack of management involvement with design of MISNarrow and /or inappropriate emphasis of the computer systemUndue concentration on low level data processing application particularly in accounting areaLack of knowledge management of computersPoor appreciation by information specialists of managements full-strength information requirements and of organizational problemsLack of top management support2.3 Knowledge Requirements for MISAs there are new concepts techniques are developed and also developing with respect to the solution of the problems. T. Lucey figure out the major areas of knowledge with respect to development operation of MIS (Lucey, 1991-1992).GeneralSystemsConceptsManagementFunctionsLevelsThe Nature of infoI nformation communication theoryThe InfluenceOf InformationTechnologyPlanning DecisionMaking MethodsTechniquesControl PrincipalsFeedback Feed forward organizationalStructures andProcessesKnowledge Requirements for the Development Operation of MIST. Lucey also describes the information system in outline as shown in the figure (Lucey, 1991-1992) infoCaptureDataDataProcessingFileStorageProcessed DataDataCommunicationProcessed DataUsersUsersProcessing/UnderstandingUsers Memory/Knowledge baseIInformationActions/Decisions/Changes etcInformation System in OutlineMehmet describes and evaluates seven methods of fore-casting requirements by industry and occupationeconometric methodProductivity methodTrend projection methodEmployers survey methodMethod of prognostic specialized manpower requirements inter-area comparisons methodElasticity of factor substitutions method. (O., 1965)Ahamad and Blaug (Ahmad B. and Blaug M.) point out that manpower forecasting is save in its infancy yielding crud e and often useless results. All too many models are still based on the woefully lacking fixed-coefficient approach pioneered by Fames utilizing productivity, education and participation ratios. The preponderantly demand-oriented approach, the assumption that ratios are independent of technological growth, changes in industry output and education standards, and the failure to match substitution effects have contributed to make the models suspect as serious undertakings (S, 1962).Broadly stated, manpower planning is the process to ensure that the right people are at the right place at the right time in sufficient numbers to efficiently accomplish anticipated tasks (E.W., 1967). Wlkstrom (W.D, 1971) identifies seven contributing factors quick-wittedness of technological change.long lead time for training and development, tight labor market,demographic changes (e.g., lower birthrate during depression produced decrease in 35-44 age group),manpower coming to be viewed as faultfinding incorporated resource,government influence through programs and contracts,Manpower planning is becoming accepted as integral part of corporate planning.The last point only serves to attest to the complexity of manpower planning as an integral component of corporate planning a vast and ill-defined field in its own right. As Lorange (Lorange.P, October 30 November 2, 1974) comments in his survey I am left with the uncomfortable feeling that somehow it is difficult to fit the bits and pieces together. There seems to be considerable lack of consensus in the literature when it comes to such central issues as the nature of planning systems, what constitutes relevant empirical areas of research, etc. Also, the common vocabulary seems to be surprisingly small and too often lacks adequate definitions. The research design frequently seems to be sloppy, particularly in neglecting to state assumptions when limit the universality of the sample.2.4 ModelsThere are different models that are use d for planning and decision making. T. Lucey delimitate the model in simple words Model is any simplified abstract of reality. It may be physical object such as architectural scale model or it may be what is termed as symbolic model. These are representation of reality in numeric, algebraic, symbolic or graphical form. Business model are symbolic models which represent the organization operations by set of logically think arithmetic algebraic statements. These models are used to enhance a manager analytical ability.T. Lucy broadly classified the models used for management purpose (Lucey, 1991-1992).Computer BasedManagement ModelsSimulation Models-Enable Different Conditions to beExploredOptimization Models-e.g. LinearProgramming(Useful for derivingthe best solution incertain structuredProbabilistic Models-Incorporate unbeliefby Allowing Multi-PointEstimatesDeterministic Models-Assume Certainty by usingsingle point Estimatesdecisions usually attactical operationalLevels)(Useful for Exploring Risk Uncertainty and Complex Relationships Provide answers to What If? Questions can be useful at all levels)2.5 Model DevelopmentAccording to T. Lucey To develop a model which is realistic and has adequate predictive qualities is a collaborative effort between management and information specialists (Lucey, 1991-1992).He Key points areThe model should have a purpose and be objective oriented.Model building is an iterative, creative process with the aim of identifying those shifting and relationships which essential be included in the model so that it is capable of predicting overall system performance. It is not essential or indeed possible, to including all variables in a model. The variables in a model of great importance are those which govern, to a greater or less extent, the achievement of the specified objectives. These are the critical variables.The best model is the simplest one with the fewest variables that has adequate predictive qualities. To obtain thi s ideal there must be a thorough understanding of the system. The management who operate the system have this understanding and must be involved in the model building, otherwise over elaborate and overly mathematical models may result if the model building exercise is left to systems professionals. OR Systems ExpertiseModelDevelopmentSystem beingStudied, includingManagement andPersonnel, PhysicalResources, Inputsand Outputs etcModel ObjectivesManagement Know HowRaw DataModel cogent evidenceand TestingImplementationOfDecisionsManagementReview ofModel ResultsProcessingof ModelManagement Model ResultsDecisionsOptimizationJames. O Brien defined optimization as It is a process of finding optimum value for one or more target variables, given certain constraints. Then one or more other variables are changed repeatedly, subject to the specified constraints, until the best value for the target variable are discovered (O Brien).Mer P. Martin define optimizing as The process of seeking the best possible choice(C Merk P. Martin, 1991)Purkiss (Purkiss) developed a linear programme (LP) model for hiring, firing, and redeployment of workers in the British Steel Industry. Assuming constant flow rates, his model minimize manning costs (over manning, under manning, and current level). Purkiss acknowledged the difficulty of determining cost coefficients and agreed that it is preferable to have hierarchically structured sub-objectives.Morgan (RW) proposes an LP model for the Royal Air Force in which he minimizes costs associated with recruitment (advertising and training) , redundancy, over manning, and pensions by controlling manning levels, promotions and redundancies subject to establishment and flow constraints.While it might seem to the uninstructed reader the LP models currently dominate the field, this is not necessarily the case. In many instances, aggregated simulation models run more complex work. Another approach is entity simulation modeling in which individual records are stochastically aged during a simulated time horizon (Piskor, 1976).2.7 Reasons for Using ModelsT. Lucey summarized the reasons into three main categories (Lucey, 1991-1992)The model is cheaper.Study and redesign.Specialized assistance.Research MethodologyThe plan of the study has the following stagesProblem IdentificationDevelopment of a Questionnaire,Data GatheringData AnalysisData ModelingTesting and ResultsPublication of ResultsDocumentationData Collection AnalysisThe expected results of this study may beA data gathering tool in the form of a QuestionnaireA group of models, like, Conceptual Model, Physical Model, Symbolic Model etcResults and Information for Decision MakingThesis and results Publications