The term industrial tour refers to the process of preparing report on an industry by visiting it physically, observing its production process and gathering relevant data from the management personnel, analyzing and evaluating data, and findings and drawing comment on the performance of the industry. As the part of 4th year, we have visited Industrial Hand Protection Ltd (IHPL). It was established in Bangladesh as a foreign Direct Investment(FDI).It is located in the area of Chittagong Export Processing Zone(CEPZ).It is established as Private Ltd company. It produces hand gloves for export only. It has no market in Bangladesh at present. It collects raw materials like yarn from different countries and convert raw material into finished goods. After that it exports those in different countries according to head office. Now a days Bangladesh is emerging as a leading economic region in South East Asia and there is an increasing competition between national and International Corporation. Since Industrial Hand Protection is a global company, it has to compete with the international corporation. Since the business environment is now highly competitive, customers are the king .As a result all companies are developing their products to satisfy their customer. IHPL is also developing its product and maintaining its quality according to their customer needs.
OBJECTIVES OF THE STUDY
The basic or main purpose of report is to learn practical knowledge about business world for balancing the gap of our industrial policy in the modern job market. The objectives of this industrial tour are as below:
i) The prime objective of the study is to know the production process of the company, types of raw materials and sources of the raw materials. ii) To know the management system of the industry.
iii) To assess the potentiality strength and weakness of the company. iv) To identify an overview of Industrial Hand Protection Ltd.
IMPORTANCE OF THE TOUR
Now a day’s practical knowledge is mostly emphasized on business perspective. For this reason, industrial tour does a great work to achieve practical knowledge. After visiting Industrial Hand Protection Ltd we have gathered a huge practical knowledge like controlling system, training facilities, management system, and promotional system, production system and so on. We further know about the compensation policy, pricing policy, purchase & sales procedure, sources of raw materials and transportation system as well.
METHODOLOGY OF THE STUDY
Today’s study is conducted primarily in participatory research analysis method and secondary on practical and theoretical analysis. The research supervisor proposed research topic and thus questionnaire was made. This questionnaire was placed before the official of IHPL & subject to the approval of the research supervisor to provide their answers. Practical visit took place subsequently. Primary and secondary data was collected from every possible source.
The primary sources are as follows:
❖ Face-to-face conversation with the respective offices and stuffs of the branch. ❖ Piratical work experience in the different desk of the department of the branch covered. ❖ Observation of the production and management sector of the company. ❖ Face-to-face conversation with production related employees ❖ Related field study as provided by the officer
The secondary sources of data and the information are:
❑ Annual report
❑ Web site address
❑ Book basis articles
Brochure provided by the company, catalogue, prospectus
Limitation of the Study
We tried our level best to collect information as much as necessary to prepare a perfect report on Industrial Hand Protection Ltd. Since the people of Bangladesh have a negative approach regarding research, it is very difficult to conduct a research in our country. As a result we face a lot of problems in collecting information. They are very much indifferent to provide relevant information. So we prepared this report on the available information we are able to collect from different sources. The limitations of the study are given below: • Industrial Tour is organized for only one day. As a result it is very difficult to collect as much as information required preparing report. • Some information is very much confidential. So they do not provide that information. • Most of the officials are so busy to provide us enough time for discussion. • It is established in Bangladesh in 2010.So we are unable to collect much information. • Employees have the negative concept regarding the research. So they would not like to provide much information. • They have no well organized website, annual financial report, magazine, and any periodical report. So to collect secondary data we have got very limited area.
Brief History About Industrial Tour
Industrial tour is very crucial for the BBA program. So during the BBA program every student needs to visit in any organization to gain practical knowledge which will help to make a connection between the theoretical and practical knowledge. Since we are the students of 4th year of the BBA program, we visited an industry named Industrial Hand Protection Ltd. At first our teachers made a group of four members. Our teacher along with the students fixed a date to visit the company. It was 30th June, 2012. On the
due date we gathered in front of the shopping complex at 7.30 am. Teacher and all members came there in time. After taking breakfast we started our journey for IHPL under the direct supervision of our teacher named Anupam Kumar Das, lecture, Department of Management Studies, University of Chittagong. Surprisingly we got a guest teacher named Mr.Shanewas Mahmod Sohel, Assistant Professor, Department of Management Studies, University of Chittagong. We reached at IHPL at 8.30 am. Mr.shihab Uddin, HRofficer, received us cordially and took us to the conference room. They provide us some snacks and tea as a breakfast. All personnel of the organization came and introduced with us at 9.00am.Mr.K.M.Arif Mohin Uddin gives a brief speech about what we will do during our tour and provided us the schedule of the activities of the tour. After completing the introduction, Mr.Akber Haqqani(DGM),Head of production provided a speech about the history of MIDAS, its mission, vision, and the present scenario of it. He also described about the potentiality of it.
He showed the overall picture of organization. We were listening the speech attentively. Because his presentation was very nice, easy to understand, clear and interesting. He also gave us an opportunity to ask any questions about IHPL. After the presentation we took a tea break according to the schedule at10.30 am. Then Mr.shihab Uddin, HRofficer, gave a presentation about the functions of Admin& Personnel Department. He described what HR Department does for motivating employees and achieves higher productivity. He also described how they evaluate their strength and weakness, opportunity and threats. After that he gave us opportunities to ask something and we asked different questions and noted answers. After that Mr.K.M.Arif Moin Uddin told very briefly about how to develop our career plan. Then Mr.Shihab Uddin and Mr.K.M.Arif Mohin Uddin (Manager Admin& Personnel) took us to visit the factory. We visited the whole factory and directly observed how they are producing different hand gloves and prepared them for final sell and the packaging process. They produce the gloves through two processes. One is automated process and another is semi-automated process. We saw that at first production engineer prepared a mixture of chemical .Then raw gloves was sunk into it.
There were two boilers which are used for heating the gloves. Production engineer told us about the whole production process in detail. They also told us they will increase the number of boilers if the government provides available gas and electricity. We saw that the production process is not so simple. It is very complex. Gigantic set up of compliance and its movement is glared and flickered to us. All production engineers clarifies how the gloves are made and about their features. After that we went to the warehouse. We saw that they had a very large warehouse. By visiting factory we had got a overall view of the production process, maintaining quality, and stored process. After that we took lunch with Mr.K.M.Arif Mohin Uddin and Mr.shihab Uddin, HRofficer, at pm. After taking lunch, we went back to our conference room. After tea break Mr.Adnan Peerzada from Pakistan, Deputy Manager, Fin.&com. gave a brief presentation on the responsibility of a good manger at2.00 pm.
He is very sincere, co-operative and cordial. He shared with us about his personal life. He told us how he developed his career in practical. He also said shortly about supply chain management. He tried to provide a clear concept of supply chain management with a practical example. After that Mr.K.M.Arif Mohin Uddin invited us to discuss the total production process of the total plant in the conference room. He described the whole production process in brief and we noted it. After that different heads of the department as Manager Admin &Personnel, Deputy Manager of Fin. & Com. Production Engineers, AM-QA&QC, and HRO came to conference room and invited us to ask different questions about IHPL. We along with our teachers asked a number of questions regarding any confusion. They answered all questions nicely and very clearly. At last we can say that all the personnel of the organization were very much co-operative, friendly, and helpful. Our industrial tour formally was finished at 4.00 pm.
GENERAL IDEA ABOUT INDUSTRIAL HAND PROTECTION LTD. (IHPL)
MIDAS was started in 1975 in Pakistan. The owner of the organization was from Gujarat. The operated area of it is in India, Pakistan, Srilanka, Bangladesh, Canada and Middle east country. The name of the sub-project of MIDAS is Industrial Hand Protection Ltd. It was located in Chittagong Export Processing Zone (CEPZ).It is only related with production of different types of hand gloves. It does all production according to the policy of head office which is situated in Canada. Head office determines all types of production, marketing, financial policy. Industrial Hand Protection Ltd implements the policy that is taken by head office. IHPL collects raw materials from Malaysia and others countries. Then it converts these into finished products and export other countries directed by head office. It produces different types of industrial gloves for the purpose of export. IHPL is fully export oriented industry. It runs its production in two ways. One is automated production and another is semi-automated production. It exports mainly in USA, Canada, Australia, South Africa, India, Holland, Spain etc. At present it does not sell any products in our country. It also maintains large warehouses for ensuring same day services .Their market share in the world is 35 millions. Sales Volume in 2012 is 300 millions and their targeted profit in 2020 is 1200 millions. Their sourcing office is China in 2010. They mostly export in India and USA. Their manufacturing Locations are India, Pakistan, Bangladesh, Canada
Industrial Hand Protection Ltd.
1. Name the company: Industrial Hand Protection Ltd.(IHPL) 2. Present Address: Plot No.6, Sector 1A, Road No.5, C.E.P.Z, Chittagong-4223, Bangladesh. 3. Head Office address: Chittagong Export Processing Zone(CEPZ) 4. Location of the factory: Chittagong Export Processing Zone(CEPZ) 5. Year of establishment: 2010
6. Initiative organization to establish this industry: Foreign Direct Investment(FDI) 7. Type of operation: Production Oriented.
8. Year of starting its production: November, 2010.
9. Total number of employees: 600
10. Nature of ownership: Wholly Owned
11. Type of company: Both Labor and Capital Intensive.
12. Legal status of the company: Private Ltd. Company
13. Purpose of production:100%Export oriented
14. Production Area: Chittagong Export Processing Zone (CEPZ)
15. Head office : Canada.
16. Two types : Garments and Gloves. 17. Gloves production in Bangladesh: Automated process Semi-Automated process 18. Market: United States of America, Europe, Asia, Africa, 19. Exporting Countries: USA, CANADA, AUSTRALIA, SOUTH AFRICA, SPAIN, RUSSIA, HOLAND, INDIA 20. Market share in the world: 35 millions
21. Sales 2012: 300 millions.
22. Sales 2020: 1200 millions.
23. Most Exported Countries: India and USA.
24. Annual Export Volume: $90,00000
25. Manufacturing Location: India, Pakistan, Bangladesh, and Canada. 26. Product concern: Largest.
• Effective Human Resource department resulted in a strong professional management and marketing team. • Independent governing advisory boards in different countries. • Strong purchase and finance departments in all MIDAS location with excellent relationship with banks. • Establishment of different training centre for customer’s stuff, employees and new employees. • Time and money spend to create brand value
• Establishment of large warehouse and same day service. • Huge investment in research and development including 30% of time for improving existing product and 70% on new innovative product and process. • Straight short line production with improved quality product. • Team spirit, open communication and co-ordination among team members. • Marketing by Web on cloud computing.
Key Personnel of IHPL
Key Human Resource personnel of IHPL
Mission And Vision of (IHPL)
Vision 2020: To be one of the leading 5 safety companies in the world
1. Great team work.
2. Quality And innovative production.
3. Brand recognition in emerging world market.
Gaining Drivers of Industrial Hand protection ltd(IHPL)
• Innovation: IHPL expends a lot amount for the purpose of innovative workers. About 70%of R&D is used for innovation of the product. • Experienced Employees: Most of the employees of the IHPL are so much experienced. Because continuous training program is followed by the organization. • Co-operation: Co-operation is the main driver of the higher productivity. Co-operation among the departments and that of the employees is important for achieving the goal effectively and efficiently. Since IHPL follows the participative management it can able to ensure co-operation. • Quality Maintained: They maintain the standard quality of the product. They produce the customized product. They have a good monitoring team to continuously monitor the quality of the product. • Human Resources Leadership: A good leaders exist in the organization. They create vision and directed the all employees toward the achievement of the organizational goal. • Update Technology: They import the updated technology and used in the production process. As a result they have been able to automatize the production process the productivity of the employees has increased rapidly. • Team Work: Team work is the best for increasing productivity of the employees. They have made a number of groups consisting of 24 members in each group and assign their target that must be achieved within a specific period of time period of time.
Overal View of Organizational Strategy
Main Themes of The Company
• Cost Competitiveness.
• Organizational Structure.
Core Safety Values
SWOT Analysis of the IHPL
Competencies of the Industrial Hand Protection ltd.
• Customer Focus
• Motivating Others
The key points of management practices of IHPL are discussed below:
IHPL follows the Line & Staff Management style. There are four level of management in this organization. There is no managing committee in this organization.
Planning is the set of activities such as selecting missions and objectives and the actions to achieve them, it also includes decision making. IHPL also has a strong planning process in which the authority has to formulate these plans. Most of the times top-level management makes decision. IHPL takes plans for intermediate term.
Goals and Objectives:
Objectives or goals are as Milestone where organization and individual activities are directed and it wants to reach. Objectives are state end results. Clear and verifiable objectives facilitate measurement of the surplus as well as the effectiveness and efficiency of managerial actions.
IHPL considers, to be one of the leading 5 safety Co’s of the world as a vision of setting organizational goals and objectives.
Specialization and Departmentalization:
This organization follows work specialization for every employee. Work specialization refers to every employees should specialized in the particular field. MIDAS does not follow generalization. And it generally follows the departmentalization. MIDAS has eight departments.
Span of Control:
Span of Control means the number of subordinates a manager can effectively and efficiently direct.
Wider span are more efficient in term of cost. However at some point wider pan reduce effectiveness. That is, when the span becomes too large, employee performance suffers because supervisors no longer have the times to provide the necessary leadership and support.
Narrow span have three major drawbacks.
* They are expensive because they add level of management * They make vertical communication in the organization more complex * Narrow span of control encourage overly tight supervision and discourage employees autonomy.
IHPL follows narrow span of control and manage effectively.
Decision-making is defined as selection of a course of action from among alternatives; it is at the core of planning. Decision-making may be either centralized or decentralized. The decision making process of that organization is centralized by the authority while taking strategic decision.
IHPL also follows participative management in decision making.
Simply, Production is the process of converting raw materials into finished goods that have utility values. Production refers to the processes and methods employed to transform tangible input(materials,semifinished goods,or subassemblies)and intangible inputs(ideas, information, knowledge) into goods or services. Production management refers to the job of coordinating and controlling the activities required making a product, typically involving effective control of scheduling, cost, performance, quality, and waste requirements. IHPL production system is customer based. So IHPL production system is intermittent. IHPL production planning and production scheduling is order based.
Basic raw materials and sources of raw materials:
|Raw materials |Sources of raw materials | |Chemical
|International and local suppliers | |Yarn |International and local suppliers |
Problems in procuring raw-materials:
• Rising cost
• More time to collect raw material
• Frequent change in price
Overcome in procuring raw materials:
• Building loyal relationship with suppliers
• Better transportation
Types of Products
There are different kinds of hand gloves are producing IHPL. Products are as follows –
* Journey gloves
* Industrial gloves
* Chemical resistance gloves
* Hit resistance gloves
* Fashion garments gloves
* Medical gloves
* Cut resistance gloves
* Sports gloves etc
Uses of Gloves
Production process of hand gloves
Total 645 people (574 workers and 74 employees) are worked in IHPL for producing of hand gloves. Raw materials are important for gloves production. How IHPL produces hand gloves that means how chemical and yarn converts into hand gloves? There are two production process of producing hand gloves such as — • Automated hand gloves production procedure and
• Semi-automated hand gloves production procedure.
We can show it by following flowchart ——
Automated hand gloves production procedure (oil based):
Semi-automated/Manual hand gloves production procedures (water based):
Oil based hand gloves are used for normal or rough use. On the other hand, water based hand gloves are used for different purposes such as glass factory, garments industry, steel industry, knitting industry, medical operation, sports, wok shops, chemical industry etc.
HUMAN RESOURCE DEPARTMENT
Human resource department is responsible for how people are treated in organizations. It is responsible for bringing people into the organization, helping them perform their work, compensating them for their labors and
solving problems that arise. Management of human resources is that function of all enterprises which provides for effective utilization of people to achieve both the objectives of the enterprise and the satisfaction and development of the employees. Human resource management differs from traditional personal management. Opening of Human Resource Department signifies growing awareness of the importance of human factor in organizational performance.
IHPL’s one of the winning strategies is effective HR dept. resulted in a strong professional management and marketing teams. The role of the HR department on the overall performance of the organization is emphasized by:
• Retention of employees
FUNCTIONS OF HR DEPARTMENT
• Recruitment of workers / staffs through interview ( daily recruitment of workers) • Workers and staff orientation and personal grooming training. • Daily security setup checking
• Ensure cleaning in IHPL
• Logistics support
• Routine co-ordination among suppliers
• Attendance analysis and reporting
• Leave report maintaining
• Co-ordinate BEPZA and government offices
• Ensure staff’s salary bank account making
• Training information update and arrange recommended training • Ensure health and safety at work
• Employee counseling
• Expatriate’s work permit
• Wastage management
• Updates of registration and record
• Employee records
• PETTY cash management
• Employee grievances
• Performance appraisal
• Job description and job specification
• Developing and implementing different policy
Performance management is the process employers use to make sure that employees are working towards organizational goals. Employee performance of IHPL is appraised on yearly basis and 3 month’s performance review is conducted for this purpose.
High Performance Drivers
It tries to maintain high performances through following 3c factors. IHPL do believe that, high performance is the outcome of the multiplication of clarity, capability and commitment. Those are: • Competency.
It can be expressed as follows:Competency*Capability*Commitment = High Performance Absenteeism And Turnover
Absenteeism: An absence refers to time an employee is not on the job during scheduled working hours , except for a granted leave of absence, holiday or vacation time. Turnover: Labor turnover is the rate at which an employer gains and loses employees. Simply we can say “how long employees tend to stay” or “the rate of traffic through the revolving door”.
Overview of the absenteeism and turnover rate of IHPL
Comparison of Satisfactory And Dissatisfactory factors of IHPL
THE MAIN AREAS OF HUMAN RESOURCE DEPARTMENT
The personnel manager is responsible for all the decisions regarding HRD but before taking any decision he consults with the HR officer. There is an organized HR policy in this type of production oriented company. IHPL’s HR policy is international although it’s an MNC. It’s human resource policy is:
• Recruit competent workforce
• Training and development of workforce
• Retain good workforce by logical benefits and compensation
This department is of highest significance as IHPL do believe that “ Our Strength is Our People” Co’s policy regarding HR planning, job analysis, recruitment, selection, training and performance management and reward system are discussed in the following segment of the paper:
HUMAN RESOURCE PLANNING
HR planning is the process of deciding what positions the firm will have to fill and how to fill them. The main task of HRD is a good HR planning. HR planning, in turn, involves job analysis and forecasting the demand and supply of labor.
An organization consists of positions that have to be staffed. Job analysis is the procedure for determining the duties and skill requirements of a job and the kind of person who should be hired for it. It’s one of the most important task that performed by the HR staff. Through job analysis, the vacant position is found out and the job description and the job specification is prepared.
In case of job analysis, IHPL follows 3types of methods:
• Observation method
• Structured questionnaire method
• Individual interview method
Job description is a written statement of what the worker actually does, how he or she does it and what the job’s working conditions are.
The job specification takes the job description and answers the question, “what human traits and experiences are required to do the job well?” It shows what kind of person to recruit and for what qualities that person should be tested.
IHPL conducts job analysis to come up with job evaluation. And for each and every position in it there are job description and job specification. In the selection of employees it follows job specification.
In case of recruiting employees the company uses
• School placement
• Employee references
To search for required candidates.
For advertisements for employee recruitment, IHPL uses:
• Daily newspapers
• Internet / on-line
For skilled jobs for IHPL, the most popular recruiting sources are:
• Reference checking
• Labor market campaign
• Existing employee reference
The most popular sources of managerial jobs are:
• Newspaper advertisement
• Walk in interview
After recruitment, the company goes for selection procedure. The preparation of a short list of candidates is based on the following criteria:
• Chittagong zone living people
• Positively aggressive hard working person
For employee selection, the company follows 3 types of selecton tests:
• Written tests
• Oral tests
• Medical tests
In the selection process, the sequential steps involved can be shown in the following diagram:
In case of daily worker selection, the procedure is:
After selection, the employees are assigned to different types of jobs on the basis of job description. While selecting employees, the problem that the company faces is the lack of competent people
TRAINING AND PERFORMANCE MANAGEMENT
Training is the process of teaching new employees the basic skills they need to perform their jobs. In IHPL there is an organized training and development program to develop employee skills and productivity. In determining the training needs of the employees, IHPL considers productivity. 3types of training methods are applied here:
• classroom lecture
• on the job training
• external training
after the completion of the training program, employees are assigned to predetermined positions.
Performance management is the process employers use to make sure that employees are working towards organizational goals. Employee performance of IHPL is appraised on yearly basis and 3 month’s performance review is conducted for this purpose.
IHPL do believe that, high performance is the outcome of the multiplication of clarity, capability and commitment. That is: High Performance = competency* capability * commitment
Before constructing it’s reward system, IHPL evaluates the jobs using Point Method. It sets it’s basic pay based on:
• academic qualification
traditional method of administrative pay is used in here. BEPZA has a great
influence on it’s payment system. In order to retain highly experienced people, IHPL uses:
• providing extra facilities
benefits provided to the employees are:
• house rent
• DA / TA
Employees get bonus on yearly basis. Facilities are reactive here.
• QC is a procedure or set of procedures intended to ensure that a manufactured product or performed service adheres to a defined set of quality criteria or meets the requirements of the client or customer. • In Order to implement an effective QC program, an enterprise must first decide which specific standards the products or service must meet. Then the extent of QC actions must be determined. (Ex: the percentage of units to be tested from each lot).
Quality Control Procedure in IHPL
▪ In IHPL Quality control procedure is done through internal & buyer consent. ▪ 100% audit (Third party audits from buyer side).
▪ Raw material inspection.
▪ Dangerous article protection (steel fragmented, niddle parts, safety measures). ▪ Accepted Quality level.
▪ Quality accessories and chemical used.
▪ Automated weaving machine.
▪ ISO 9001 : 2008 is followed in case of product Quality control.
▪ Customer expectation and ISO standard are followed for quality measurement. ▪ They have a skilled inspection team for quality control. ▪ This team consists of 24 members.
▪ IHPL has two different maintenance policy for equipment including i. Preventive maintenance policy
ii. Repair maintenance policy.
Inspection services & testing in IHPL
IHPL maintains some inspection services and testing procedures for ensuring product quality including:-
Preshipment Inspection: An inspection to guarantee the conformity of production to their specification. Production monitoring: Constant oversight in factory with daily reports on quality and production status. During production check: Control and recommendation for production process and capacity. Initial production check: Inspection of machinery and materials to be used for their product prior to production. Container loading check: Guarantee the finished goods meet their specification (Product type & quality) and are loaded.
IHPL produces safety hand gloves under Midas Safety has been Protecting the Working Hands of the World. IHPL is a manufacturing unit of Midas Safety, and a thoroughly labor intensive unit also. About 574 labors are working in it with two distinct shifts – Day shift and Night shift. For manage a large number of labor there have a strong labor management unit. This unit recruits, selects, trains, reward and terminate labor. There have no labor union and no CBA also. Labor cannot participate in decision making. IHPL provide food facilities to its worker. It has own canteen for its worker and provide two snacks with tea and lunch for day shift and three snacks with tea and dinner for night shift. Though IHPL situated in CPEZ, thus it need to follow instruction provided by BEPZA. BEPZA labor administration:
The BEPZA fixed minimum wages in October 1993 for categories of trainees, unskilled, semiskilled, and skilled workers at US$22 to US$63 per month. These rates have never been revised. The minimum has become the effective maximum. The classification of workers is also done entirely by the employer. Similarly, working hours, paid holiday and other leave, payment of wages, and maternity benefits are all decided unilaterally by management. The BEPZA document, Labor and Industrial Relations, rules that “BEPZA issues directives from time to time determining minimum wages.” It is understood that the minimum wage, US$22, issued in 1993 still remains valid, although in national laws, periodical revisions are provided for. This salary is less than US$1.00 per day, the criterion used internationally to identify the poor. These issues require collective bargaining and action including strikes if employers do not respond to workers’ demands. Official documents do not indicate how an offending employer is punished. There is no regular inspection by BEPZA Labor Administration, nor is there any requirement by employers to report on compliance. Because of this, exemption from the Industrial Relations Ordinance appears highly detrimental to workers’ interests. In February 1986 the government exempted the BEPZA from the Employment of Labor (standing order) Act.
A notification in January 1989 also exempted EPZ enterprises from the Factories Act 1965. These two acts related to basic conditions of employment (daily, monthly, casual, etc.), dismissal procedure, and provision of safety, health, and sanitary conditions, including facilities for women workers and their children. Compensation for dismissal is mentioned in the BEPZA booklet on labor and industrial relations. But the reasons for discharge are not covered including arbitral dismissal. According to the BEPZA booklet, reasons for dismissal include physical and mental incapacity and continued ill health, with compensation of one month’s pay for every year of service or any part thereof in excess of six months. But the booklet does not clarify whether such dismissals are scrutinized by BEPZA prior to an employer’s order. Similarly dismissal on grounds of misconduct is permitted “after due enquiry proceedings,” (presumably by the employer). These provisions are liable to violation of workers’ rights by the employers. Remuneration:
• The parliament passed the EPZ Workers Association and Industrial
Relations Act 2004(Amended up to October 2010). • Competitive wages in respect of semi skilled, skilled and high skilled. • The average monthly wages has been practiced as follow: ▪ Unskilled US$ 39.00-48.00
▪ Semi-skilled US$ 55.00
▪ Skilled US$ 61.00-109.00
• Other benefits include Conveyance Allowance, House Rent, Medical Allowance, Maternity Benefit, Festival Bonus, Provident Fund and Overtime. Considering the production cost investor is being deemed to be satisfied with the overall productivity of the labors. Human Rights in EPZ:
(a) Pressure to enhance welfare
It appears that the BEPZA and investors in EPZs are under social and international pressure not only to enhance the welfare of the workers, but also to consult the workers in the process. According to the BEPZA Bulletin October – December 1999, a Conference of Investors on issues pertaining to labor relations in EPZs of Bangladesh was held in Dhaka in December 1999. The Minister of Labor, the Minister of Industries and the American Ambassador to Bangladesh attended the conference. According to the Bulletin, the “investors in the EPZs of Bangladesh have proposed forming a Tripartite Welfare Committee to look after and protect the interest of workers”. And “the US Ambassador in his speech encouraged the investors to form a committee to help devise an acceptable method of ensuring the welfare of the workers in the EPZs of Bangladesh”. (b) Pressure from foreign/international agencies
As early as 1991, AFL – CIO, the largest trade union federation in USA, petitioned to revoke Bangladesh’s general system of preferences (GSP – tariff concessions) because of various alleged infringement of labor rights, including the denial of freedom of association in the Chittagong EPZ. After a review of the petition, the US government decided to continue Bangladesh’s GSP privileges, following Bangladesh government’s assurance to allow freedom of association in the EPZs by 1997 (Daily Star, 28 October 1999). In June
1999, AFL-CIO filed another petition to revoke the GSP privileges of Bangladesh, based solely on the country’s failure to act in accordance with the assurance. Since then the US ambassador has repeatedly threatened withdrawal of GSP privileges on the same grounds.
On the other hand in a meeting with BEPZA chairman, the Japanese ambassador categorically stated, “Japan does not want trade unions in the EPZs at this moment’ (Daily Star, 20 February 2000) and he expressed satisfaction at the congenial atmosphere in the two EPZs of the country.” A Korean entrepreneur observed that international labor standards maintained in developed countries should not be applied in Bangladesh because the issues of industrial relations here were different. According to another report in the Daily Star of 19 October 1999, the Bangladesh government had signed an agreement with the US Trade Department in 1994 to withdraw the exemption from Employment of Labor (standing orders) Act 1965, and from the Industrial Relations Act 1969, by 1995 and 1997 respectively. Exemption from the Factories Act was withdrawn in 2000. On the other hand, the Chittagong EPZ investors told the US ambassador that permitting trade unions would also be a breach of contract by the Bangladesh government, which had promised a peaceful atmosphere in the Industrial Zones (Daily Star, 28 October 1999). Meanwhile acquisition of a huge area of land for a Korean EPZ has displaced 425 families and the process has been challenged in court by a religious group, as it sought to acquire a church. Complaints of corruption and harassment in payment of compensation to displaced landowners for land acquired for Comilla EPZ has also appeared in the press. (c) Pressure for consultation with workers
In the conference, it was proposed that ‘the Welfare Committee will comprise of worker representatives, BEPZA, and BEPZA enterprises.’ This indicates a current lack of arrangements for consultation in any forum with representatives of workers. In the three bodies comprising the BEPZA, no representative of workers is included. The Ministry of Labor is not even represented in these bodies.
(d) Divided opinion among ministers
In the 1999 conference, the Minister of Labor made a vague statement that ‘the government will take some measures to protect the interest of workers and the investors equally; while the Industries Minister was more categorical in saying, “The prime objective of the government is to increase employment opportunities through increased investment. Any issue relating to EPZs of Bangladesh should be considered cautiously.” (e) Opposition to ‘traditional trade unions’
Other speakers in the conference cautioned that foreign investment will be discouraged if ‘traditional trade unions’ are introduced. In Bangladesh, labor laws provide for election of a ‘Collective Bargaining Agent’ (CBA) from among the registered unions in an industrial undertaking and traditionally the CBAs have exceeded their legal rights and created labor unrest, allegedly for the interest of the CBAs. Major reasons for such a situation are an ineffective labor administration and political interference in implementation of labor laws. (f) BEPZA documents
Several BEPZA documents mention that BEPZA pursues a production-oriented labor law. The authority administers labor matters in the EPZs of Bangladesh. Labor unions are neither allowed to form or operate within EPZs. This is a strong indication that the right to: organize and bargain collectively is denied to workers in EPZS. The BEPZA documents do not mention how the labor matters are administered in the absence of trade unions, particularly in matters that require collective bargaining, such as safety and health, minimum wage, dispute settlement, etc. From occasional reports in newspapers, it appears that labor unrest takes place once in a while due to causes like arbitrary dismissal of workers. (g) Exemption from certain labor laws
On 25 February 1986, the government exempted Chittagong EPZ from the provisions of the Industrial Relations Ordinance 1969 which recognized ILO Conventions on Freedom of Association (No. 87) and on the Right to Organize and Bargain Collectively (No. 98). The ILO considers these conventions as basic human rights. It is possibly true that
widespread misuse of liberal provisions for forming unions of workers gave rise to a multiplicity of unions and inter-union rivalry. Similarly, some
collective bargaining agents are also criticized for misusing their representative strength. However, these situations arise due to political reasons and due to poor enforcement of laws by management and the state. Absence of laws permitting trade unions is no guarantee that such situations will not appear in the EPZs as well if the political situation deteriorates and if law enforcement slackens. The relevant issue is whether BEPZA’s labor administration has promoted any alternative relief for the workers.
Export & Import
IHPL is an export oriented company. They export their products to various countries. These are as follows-
• South Africa
They mostly export to INDIA & USA. Their annual export volume is approx. 90 lac us dollar. They determine their international market demand and supply by its powerful sales team which is provided by its parent organization –MIDAS, situated in Canada.
IHPL transport goods by air & water. They procure raw materials from different countries. It need not have to pay any taxes for importing raw materials. IHPL is situated in EPZ area where companies are given special facilities and incentives in favor of their export goods; also IHPL gets special incentive facilities from
Bangladesh Govt for increasing their export. They use C&F agent for exporting their goods and collecting their raw materials.
At the time of exporting product, they faces several problem. This are-
• Timely transportation(unavailability of movers) • Dependency on middle organization: It may be caused by C&F agent. • Lengthy process in port: Because of political problem mainly trade union. • Corruption in every stage of processing
• Supply of wrong information by importer or exporter
Above mentioned problems can be solved by –
• Providing adequate transportation facility
• Reducing interference of middle men
• Handling of shipping problem in time
• Providing reliable information at the time of export and import • Eliminating corruption by enforcing rules and regulation
IHPL is a big growing factory in Bangladesh and Bangladesh Govt. should support this kind of factory to develop the country by following steps-
• To increase mobility of port: There are many kinds of problems in time of shipping goods and services. In our country labor does it. That is politicize trade union in port. this type of situation govt. can take initiative to increase mobility of port.
• Production of export cargo: In our country ,we have no emergency career service. IHPL may expect to govt. this type of facility.
• Sound quality control and grading of export consignment: In Bangladesh BSTI can do it. They may expect to govt. that BSTI will be more effective than previous.
• Effective cost control: In our country cost increase due to delay delivery, delay production, delay documentation. To reduce this govt. can
introduce one stop service centre in port and also need to make it more effective.
• Developing sound network and linkage with overseas market: To do it govt. can need to do EPB and Commerce Ministry more effective.
Corporate social responsibility of IHPL:
Corporate Social Responsibility (CSR) is defined as the way companies integrate social, environmental, and economic concerns into their values and operations in a transparent and accountable manner. It is integral to long-term business growth and success, and it also plays an important role in promoting business values locally and internationally and also contributing to the sustainable development of communities. The Government of Bangladesh works with the public and private sector, business community, civil society , with foreign governments and communities as well as other stakeholders to foster and promote CSR.
WIKIPEDIA define CSR as
CSR is a form of corporate self integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholder and all other members of the public sphere who may also be considered as stakeholders.
Corporate Social Responsibility: THE BANGLADESH CONTEXT
CSR practices in Bangladesh in its modern global terms, are relatively new, but not so for the concept itself. Because, being a part of the global market, it is difficult to ignore CSR standard specifically in the export sector like (MIDAS, young one, specific jeans) com. In general, it is true that in Bangladesh, the status of labor rights practices, environmental management and transparency in corporate governance are not satisfactory level, largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups like Consumer Forums (CAB) consumer association of Bangladesh. Globally, as CSR practices are gradually being integrated into international business practices and hence is becoming one of the determining factors for market accesses, it is becoming equally instrumental for local acceptability.
A focus on CSR in Bangladesh would be useful, not only for improving corporate governance, labor rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialization and ensuring global market access. Lack of enforcement of Industrial Laws and Regulations, weak unions, absence of consumer rights and high level of corruption within the regulatory bodies make CSR violation rampant in Bangladesh. CSR is neglected in two most significant foreign exchange sources is the RMG sector and the overseas manpower export. Unbelievably low compensation, working hours, health/hygiene/sanitation conditions, fire safety and various types of abuse are so common and to the extent of inhumanity that will shock any conscientious individual to the core. Recently, the RMG sector employees have embarked on a industry wide movement to establish their rights. Like savor, narayangong (kunchpur) in march-April in 2012.
CSR Of Industrial Hand Protection Ltd. ( IHPL)
IHPL is committed to ethical behavior and to sustainable economic development, while improving the quality of life of its workforce and their families, as well as the local community and society at large. IHPL is one of the organizations of MIDAS. It established in November 2010 in EPZ in Chittagong. Its a 100% export oriented safety material producer export gloves, heal mate, chemical resistant cover in India & others countries as per the requirement of MIDAS. Since its inception its carry our different types of CSR to govt., employees, BEPZA, EPZ & to the society. CSR to Govt.:
* Provide tax, duty, others fees timely
* Follow govt. prescribe rules & regulation
* Promote diplomatic relation with exporting countries
* Contribute t the up-liftment of GDP
* Favorable balance of payment
CSR to society:
* create employment for 600 people( 50% male,50% female) * environment safety operation
* raising living standard
* Qurbani,a very new establishment, donation to orphanage. CSR to environment:
* pollution free manufacturing
* sound waste management policy
* minimum emission of co2
* ISO 9001:2008 certified operation
CSR to employees:
* timely wage paid
* provide free lunch & dinner
* provide on job training
* provide safety material for worker in time of working
* improve skill among worker
* provide pure drinking water
* transportation facilities for employees
CSR to BEPZA:
* follow BEPZA role & regulation
* follow labor act 2006
* operation is consistent with Bangladeshi culture, norms, value. Proper CSR practice in Bangladesh can also contribute a lot to community development. The corporate house can develop the community by creating employment, providing primary education, contribution to infrastructure development like road and high-ways and addressing environmental concerns. This is more relevant for a country like
Bangladesh where the government interventions in these fields augmented by corporate alliance can go a long way in developing the economy, society and environment.
Problems of IHPL
IHPL faces generally two types of problems. They may be internal or external problems.
▪ Inadequate training and development program. ▪ Poor investment in research and development. ▪ Lack of infrastructural development of the organization. ▪ Have no own power supply system.
▪ High turnover rate of the organization. ▪ Have no local supply of raw material. External Problems:
▪ Political instability in Bangladesh. ▪ Increasing inflation
▪ Corruption in the port.
▪ Lengthy process for exporting of the goods. ▪ Economic factors: Exchange rate fluctuation, trade policy, trade relation with other country, tax rate, tariff and others non-tariff barriers ▪ Non-availability and non-frequency of transportation. ▪ Other Cultural differences like working attitudes, language, education and dexterity etc. ▪ Lack of proper supply of gas, water, electricity and so on. ▪ Labor union causes a lot of problems in case of export oriented organization.
Some recommended suggestions are given below:
• Continuous quality improvement concept should be applied for the improvement of the quality of the product. • Investment in research and development has to extend to initiate a new idea. • IHPL should provide adequate incentive, salary, bonuses and non-financial facilities to reduce the high turnover rate. • IHPL should try to produce raw material in production country. • IHPL should introduce the updated technology in the production to increase productivity. • IHPL should think the
possibilities of sells its products in Bangladesh. • IHPL should introduce the housing facilities for the employees. • IHPL should try to apply JIT concept in the inventory system.
• IHPL should try its best to minimize the lead time of the shipment of hand gloves.
• IHPL should be more social responsible and environment friendly company.
By Observing the above discussion we can concludes that the company has been maintaining excellent performance since its beginning. This is the proud of the company that it never incurred a loss since 2010 to 2012. The overall performance of accounting, management, and cost systems of Industrial Hand Protection Ltd. is to some extend conventional issue. The products of the company have wide market demand all over the world. The company earns a lot of foreign exchange which plays an important role in our national economy. Industrial Hand Protection Ltd will be the role model for export oriented industry sector within few years. Because of its quality product, uniqueness of their product, export volume and so on. One of the main problem is that IHPL uses automated machineries which hamper targeted production in case of electricity disruption. It imports all raw materials but it some times faced problems due to time limitation. If IHPL can overcome its drawbacks it will increase a large extent the volume of profit.
Since this company is established in CEPZ area they have to maintain all the rules and regulations provided by the BEPZA. So the authority can not enjoy freedom of taking decision. Their turnover rate is quite high, it needs to be checked. If it does not take initiative to improve this situation it will face difficulties because they have several competitors outside the country.
The production capacity of IHPL is limited because of their limited area. So this need to be considered by concerned authority . By analyzing sales trend and financial statement, profit and production diagram of IHPL, we can say
that the overall performance of IHPL is satisfactory. It never incurs losses since its beginning. We also know that it is a newly established company. We hope Industrial Hand Protection Ltd. will carry out its production process smoothly by removing its some silly drawbacks.
Mr.A.K.M.Arif Mohin Uddin
Manager Admin & Personnel.
Deputy General Manager (DGM)
Country Head in Bangladesh
Mr Adnan Peerzada
Department of Finance and Commercial.
Mr.Shihab Uddin Khan
Mr.Shihab Uddin Khan
Care For Others
• Unskilled labor
• Poor industry environment
• Lack of local demand
• Lack of infrastructural development.
• Fresh Environment
• Higher Productivity of worker.
• Availability of labor
• Effective collaboration among employees.
• Effective and efficient labor supply
• Participative management system
• Unbalance market distribution
• Lack of energy
• Floating worker
• High turnover rate
• Political instability
• Long lead time to export
• Emerging market
• Research and Development
• Established plan
• Building loyalty
• Growing demand
• Vast labor force with labor cost
What is expected?
The way it is expected to develop.
What has been achieved?
The way it has been achieved.
Absenteeism in percent
Turnover in percent
Month in 2012.
• Shortage of holidays
• Low medical allowance
• Long working hours
• Improper assistance from production.
• Lack of incentives
• Organizational environment
• Transportation problem in case of long distance
• Cooperation between staff and office employees
• Timely salary payment
• Freedom to work
• Basis of future platform
• Learning and participating
• Food and transportation facility
Completing Application Form
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Medical or Physical Test
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