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On completion of our report, we want to thank first and foremost to Allah the Almighty who gave us courage and strength to do so. Then we want to thank our most respected instructor Mr. ShafqatUllah, who really guides and motivate us to carry our work with real dedication. Then we want to thank Mr. Shahryar khan (Manager Quality Assurance in Bata,Pakistan) for giving his precious time to us and sharing with us the information and expertise and letting us experienced and learned great knowledge.

Regards, Ali Ahmed Soomro Umair Ahmed Jahanzeb Hussain Qureshi Sumair Khan Humza Shezad

Company Profile
Bata Pakistan Ltd was formed in Pakistan in 1952. It was a newly growing concern all over the world but in Pakistan it was established its fleet with in very short time. It was very tough decision for the Bata International to start its business in a country that was newly established. But Batas decision was quite right because there was not so tough competition in Pakistan at that time which helped them to make their foot more strong. Now Bata Pakistan is not only providing the quality shoe with in Pakistan but is also exporting its major portion of production all over the world. Within the country Bata is facing the competition with Service Industries Ltd and other private companies. According to the survey almost 89 % of the market is covered by the other organizations and 6 % by Service and 5 % by the Bata Pakistan Ltd.

Brands of Bata
Marie Claire Power Bubble Gummers North Star Scholl Weinbrenner Bata Comfort

They select their product designs according to their customer needs. And they are continuously bringing changes as the customers demands for new products. They are using the latest equipment and machinery to meet the customers demand and to provide them the product they need. Bata Pakistans Production Division is going extra miles to meet ever growing production requirements of PU direct pouring and other footwear to cater the needs of our worthy customers. During the current season, the overall production is going 120% against estimates and 130% against last year. Similarly in the area of PU direct pouring, 123% production has been achieved against the estimates and 204% against last year. This milestone in production has been a result of restructuring of Maraka and Rubber Factories. A better production planning, maximum utilization of human resources and teamwork all have been put together strategically to achieve competitive advantage in Bata products over the competition in the area of quality, prices and sales appeal.


The manufacturing plant of Bata shoes Pakistan is located near Lahore in Batapur, near the canal road Lahore. The location at this area has made the transportation quite easy. The raw material is easy to transport and the finished products are easily supplied to the retail stores and distributors.


There are many departments in BPL which are described below : 1. Personal department 2. Finance department 3. Purchasing department 4. 5. 6. 7. Local Purchase Imports

Marketing department Other department Tannery Production department Leather factory Plastic factory Rubber factory

8. Designing department 9. Laboratory 10 Merchandizing department Seasonal planning 8 week forecast 4 week forecast 1 week forecast

11 Costing department 12 Training department 13 Distribution department

The organizations effectiveness depends not only on how it is structured but also on how well its personnel are selected, trained, directed motivated and evaluated. The

personnel department of Bata shoe organization well aware of its responsibilities selects the qualified, experienced, hardworking, semiskilled and unskilled persons after observing them from different angles. Once the person selected, he or she is motivated through several incentives .The department already has a tradition to offer on the job training to the personnel .A semi skilled or unskilled person while in learning process enjoys all the benefits offered by the company to all the skilled employees. Employees are encouraged developed and trained to become more capable and competent in their jobs so that they can confront to the forthcoming challenges and problems .Several lectures, development programs, and seminars are arranged for the employees in this respect. Thereafter employees performances are also evaluated .The department future organizes different courses throughout the year to train and develop the personnel. Moreover the company sends many of its personnel to attend local courses organized by the local institutes. It also sends every year some of its personnel to attend outside courses organized by the Bata limited, Toronto and Bata shoe companies all over the world. The company invites its employees to give their suggestions regarding improvements in work methods, saving on materials, improvements in production and sales departments. Bata Pakistan limited publishes a forthrightly bulletin to inform the employees about events took place, development, sales as well as some other items of interest. Some social; happenings and educational instructions about discipline, rules and regulations, housekeeping and welfare are broadcast every week for the employees. For motivational purpose sometimes personnel department assigns a challenging project to a person. Similarly some sort of other incentives and goals are given to the personnel for the purpose of motivation and performance evaluation. All these training, developments and motivational practices ultimately contribute to the overall progress of the company.

Finance, another crucial department of Bata Pakistan Limited, deals with the financial aspects of the company. That department every year prepares aggregate budget of the company and that budget is further broken-down into several sub-budgets. As far as sub-budgets are concerned each department of company is given the target of annual budget and if any department wants deviate from the finance department to do so .The finance department keeps records of receipts payments, income and expenses of the company .That deals with the wages and salaries of the employees .It also has a responsibility to handle the assets and liabilities released issues .Furthermore ,it plays a vital role in the preparation of income Statements ,Balance Sheet and Tax documents.

Purchasing department headed by Purchases Manager, deals with the purchases of raw material (excluding hides and skins) that is ultimately used to manufacture different stores of products. Actually that department not only maintains records of material

essential to produce the products but also considers the average weekly consumption of one particular material in factory so that production process may not be hampered due to non-availability of material. That also places orders for instantly needed materials and keeps record of goods on way. Purchasing department acquires raw material through two channels.

Local Purchases Imports LOCAL PURCHASES:

The company mostly acquires raw material from different business people dwelling in Pakistan. The company through local purchases on the one side encourages the local business people, on the other side endeavors to safe valuable foreign exchange. Generally, its local purchases are Buckles, Straps, lashes and chemicals that are used in production of leather, rubber, P.V.C. BSO while working for the progress of the country, sometimes suffers due to preference given to the local purchases because the local businessmen dont possess the quality that can easily be assessed from imports. Instead of having knowledge of all these aspects still the company prefers to buy from local business community.

As mentioned earlier the company makes all out efforts to get raw material within Pakistan, then no other option left except the import of that required material from other countries. The imports are done through letter of credit which is the safest way of doing international business. Nevertheless, before placing an order of import, purchasing department makes comparison list of prices, advantages and disadvantages associated with the prospective purchases of material from one businessman to another businessman. Finally business whose rates are appropriate and yielding more advantages is given order to ship that specific merchandise in stipulated time.

Marketing Department
Marketing programs that identify and satisfy customers needs have always been a top priority in the B.S.O. As a result, entirely new types of selling systems have been created and standards developed that have influenced the shoe business worldwide. These have resulted in marketing policies and guidelines being laid down to assist the companies in training personnel and introducing modern marketing techniques. They have helped to establish one of the most effect retail distribution systems in international trade, which although standardized, retains enough flexibility to encourage cultural diversity. Guidelines have been written covering a wide range of subjects, including store locations and lay out, design standards, merchandising, inventory control and staff training. Which has led to cooperation between the companies and, at the same time, stimulated and encouraged trade between regions and countries? Product development and the introduction of brands is another aspect of marketing. Because of the

importance placed on marketing, standards and programs are constantly being improved and updated through seminars and conferences. The most important meeting of the year takes place each spring in Europe, when more than 200 participants from product development, marketing, retailing and personnel attend Shoehorn of one week. If there is a single forum, a point at which the Bata year is focused, it is the world meeting at Shoehorn. Shoehorn was originally a shoe conference to which each company brought its best shoes: from these were selected the shoe lines the organization would sell in coming seasons. Judging the shoes provided a natural, competitive stimulus for the companies, and, as a result, the quality and range of shoes steadily improved year after year. As Shoehorn matured, it remained essentially a shoe conference, but gradually expanded to included satellite conferences in marketing and retailing. Exhibition areas were expanded to enable the companies to display their most creative work to each other. As store standardization grew in importance, fully staffed, operating stores were built to show the latest features in design and selling methods. And outside experts in a wide range of business areas were brought in to leaven the mix. The evolution of Shoehorn coincided with fundamental changes in world markets. Fashions and tastes were becoming more universal: styles in Europe were on the streets of Bangkok or Sao Paulo within weeks sometimes sooner and customers were responding to the same marketing stimuli. In the late Seventies, a complete marketing and advertising program was developed under the slogan Bata understands Shoes, and offered to all the companies. The success of the program which ran in newspapers all over the world at the same time was instantaneous, and today the symbol, an open fan of shoes, is common everywhere in the world.


Bata shoe organization acquires raw material (skins and hides) from different parts of the country. These purchased skins and hides are transferred to warehouse where application of several chemicals avoids the risk of erosion and enhances the storage life. Whenever demand arises these skins and hides are transferred from warehouse to tannery.

In tannery, skins and hides undergo the following processes. i) Soaking ii) Liming

iii) Deliming iv) splitting v) Drying vi) Dying

This is a process where water and chemicals are applied and original position (when these were flay of from the animals) of these skins and hides is tried to brought lack.

In this process several chemical are injected in hides which become slight. These limed and moisturized hides can be kept in stores for a long time. These chemicals injected hides are also called wet blue leather.

This process is contrast to the liming process where injected chemicals in liming process are dejected from hides so that these can be utilized for shoe manufacturing purpose.

In this process skins and hides under-go splitting to reduce corpulence or thickness.

Here drying up process of skins or hides is done. Mostly two or three methods are used to dry up the skins and hides.

The needed pigment or color is given to the skins and hides in this process. Generally black, dark brown and light brown colors are given to the skins and hides. The dying process ends up with the finished from of leather. Finished leather is transferred to leather store wherefrom it is forwarded to leather factory according to the requirement of this unit.


Leather factory consists of several departments, is a crucial mechanized unit of Bata shoe organization where different components of the shoe are prepared and combinations of these components ultimately produce the shoes. Although leather shoes are produced in leather factory yet two types of soles are used in manufacturing leather shoes. i) Rubber sole ii) Leather sole If the rubber sole is required to produce a leather shoe that sole is acquired from rubber factory. On the other side if leather sole is required it is entirely produced in leather factory. The latter case happens rarely because most of the time rubber sole is used in leather shoes. The entire leather factory has been divided into several departments to prepare different components of leather shoes. In one department different pieces are taken from leather sheet and in another department these pieces are tailored on the sewing machines. Another department places buckles straps etc. Another department is bewitched in finishing and removing toothed edges. In prices these sorts of process are done in leather factory and ultimately these diversified components are collected together which makes the upper side of shoe attached buckles, straps, ties etc. The point of notice is that whole process in done quite and sewing are skillful and well of experienced, similarly minor faults are not skipped. The process of upper attaching with the sole begins right from here. Both the components (upper and sole) are placed on the conveyor and the labors are busy to glue the take both the components and attach these components to each other on the pressure machine, consequently, shoe take its ultimate fabrication. Although the whole shoe making process ends up here yet shoes are not supplied to packing department rather these are sent for quality control checking. After checking and scrutinizing laboratory approves to transfer these shoes to packing department wherefrom these shoes are forwarded to distribution department.

Rubber factorys process are same as that are in leather factory the only differences are (i) In the rubber factory rubber shoes are manufactured whereas in the leather factory leather shoes are manufactured (ii) In the leather factory lasts of wood or iron metal are used whereas a aluminum lasts are used in the rubber factory. The daily production of rubber factory in about 31,000 pairs of shoes.


Bata Shoe Organization always keeps eyes on the changing circumstances, fashions, trends as well as preferences of the customers. However as changes take place in market. Bata is also required to cope with metamorphosis in market conditions with the changes in product line and changes in designs of the products. Therefore Bata Pakistan limited has poised designing department where the processionals re utilizing their inherent talent. The professionals are also sent abroad for training every year to attend designing and other international seminars. This gives the first hand opportunity to survey new trends in the world market and to distill the best of these in their own designing for the customers.

Bata Shoe Organization has its own laboratory where professionals examine the quality of materials and ultimate products. Each new brand first checked in the laboratory and after the confirmation the production starts. The laboratory also conducts systematic research med at improving manufacturing process at Batapur.

Merchandising department occupies the back bone place in the entire production of Bata Shoe Organization. That department shows whole planning for production. i) Seasonal Planning ii) 8 Weeks Forecast iii) 4 Weeks Forecast iv) 1 Week Freeze

This sort of planning is done two times in one fiscal year, besides factory management, the store management also participates and determines what would be produced coming season.

Eight weeks before the start of production, management again gets together. If management anticipates any amendment is required they do it. Here production related issues are profoundly analyzed and discussed.


Again 4 weeks before the start of production the raw material production facilities, production related issues and difficulties are seen and discussed. Furthermore, it is tried to pave the way for smoothes production.

That is the last stage of planning where all the production related issues are finalized and production orders are issued one week before actual production. After that no changing in production is possible. Merchandising Department considering demands and order from different stores gives green signal to distribution department to fulfill the orders.

To provide a forecast of the estimated result on:a) Any particular shoes b) The total factory half year production plan. To provide a major control over all sections of business by comparing actual results with estimated results and taking corrective action where necessary, using the latter as measure of efficiency. To reduce costs, while maintaining or improving quality. The basis of all their costing is the seasonal production and sales estimates, which tells the production, deputies and price and profit, adrift, article-wise. The retail sale price of shoe comprises of:a) Material b) Wages c) Expenses or (O/Heads). Gross Margin. The total of these makes the retail sale price.


Bata is using its raw materials from its different suppliers. Some of the suppliers are local while some are from Indonesia. Along with their own production, they are also out sourcing for some of their products. They are keeping a check on the quality of the

products from outsourcing and using their own brand name. The raw material coming from their suppliers are stored in the warehouses. These raw materials are then moved to the production area, where the production is being done and the finished goods are moved towards warehouse again for storage after proper quality inspection. They are their own distributers and they have their own stores all over Pakistan. They have four types of store concepts. City Store The Bata City Store gives you unique shopping experience as it showcases the latest collections for footwear of local and international brands. The store ambience is designed to create a lifestyle store that reflects and responds to your needs and expectations. The Bata City stores are located in top shopping malls in big city centers. Family store Bata is the world's leading family chain thanks to the wide assortment of every fashion footwear available in our stores. The products are primarily the Bata brand, with a carefully selected assortment of articles from both local and international brands. Superstore Bata Superstore offers a wide assortment of fashion, casual and athletic for the entire family. Located primarily in urban and suburban shopping center, these spacious stores offer the best value by providing good quality shoes at great prices. Service is fast thanks to a self-selection shopping environment with qualified staff to serve and assist. Factory store Factory stores are the largest and the most value-oriented stores of our retail chain. They are ideally located in power centers, commercial parks and outlet centers with easy parking facilities. The product selection offers more than 1,000 styles of ladies, men, children and sport shoes with related accessories and apparel sold at attractive price points. It is based on a self-service concept with helpful staff available for service at any time.

It appears to me that Bata was very far in the direction of micro managing. I do not believe it would have been much fun to work for. But it would have been a rewarding experience, not just from the point of view of finances, but rather like having a very demanding teacher. You do not enjoy the experience at the time but you look back on the experience with a certain fondness. You realize that you grew under the stress; that you were stretched and it was good for you. Bata tried to make the need for such micromanagement less by the way he developed his system for setting pay and rewards. He said: "I was seeking a method which would work automatically as the sun rises and the sun sets." He wanted to windup the company and then let it run without his attention. In this system, every work unit was engaged in 'buying' and 'selling' goods and services to and from other work units. The prices were established by a central accounting office and were not negotiable. The 'customer' for the product or service dictated the quality and schedule. Naturally the setting of these prices was subjected to considerable discussion and debate. However, all of the facts and figures used in setting the prices were available to the work unit so they had a basis for their side of the debate. The prices were set with due regard for prices of similar products which might be available on the open market. Work units were not constrained to buy only from within the company. What made the Bata system different from other methods of cost accounting was the agreement that if the workers could devise an improved method, which reduced waste, improved times of delivery and produced a profit beyond expectations, the workers could share in this profit. In other words, Bata produced a system which encouraged each work unit to become more entrepreneurial. Bata had a larger purpose. He intended for each worker to become much more conscious of the economics of the factory, to relate the results of the enterprise to his own fortunes and to become a more responsible guardian of wealth. For Bata the system of internal transacting was more

than a way to run the company; it was a way to train people to become fiscally responsible in their own lives.

In brief, Bata Pakistan is doing quite good in their business, as we have already seen how well they are managing all their departments, and how effectively and efficiently their departments are working with great cooperation, by managing their intellectual capital and motivating them, and having advantage of being in this business for a very long time, they are operating like all the other well-established firms are in their respective marketing, they are able to identify and satisfy their customers needs and demands as they are in the market for a very long period of time and still competing with all the other well-known brands of the world, which describes how well they are managing their all operations till now, they are a big company having several brands, they know what forecasting methods to use for every department, so after analyzing their all operations and performance we can conclude by saying that whatever they are doing in their all departments is best they could do relative to the resources available to them, as we have seen above that BSO is using Seasonal Index Approach for the purposes of forecasting the demand, the seasonal planning is done two times in one fiscal year, factory management and store management participates and determines what would be produced coming season. They also use Eight week forecast i.e. eight weeks before the start of production, management again gets together. If management anticipates any amendment is required they do it. Here production related issues are profoundly analyzed and discussed. Then again 4 weeks before the start of production the raw material production facilities, production related issues and difficulties are observed and discussed. Then theres a 1 week freeze this is the last stage of planning where all the production related issues are finalized and production orders are issued one week before actual production. After that no changing in production is possible. Then there comes costing department which is obliged to provide a forecast of the estimated result on any particular shoes, the total factory half year production plan, to provide a major control over all sections of business by comparing actual results with estimated results and taking corrective action where necessary, using the latter as measure of efficiency, to reduce costs, while maintaining or improving quality. The basis of all their costing is the seasonal production and sales estimates, which tells the production, deputies and price, profit, adrift, article-wise. The supply chain of BSO is very well-organized, first they analyze their all alternatives for purchasing raw material, hides and skins, and then they purchase supplies from the supplier which suits best to BSO following all the criteria they use, best quality with minimum cost, then hides and skins goes to tannery, where it is transformed in to leather, then this goes to BSO production department, where leather shoes are produced in leather factory, and if rubber sole is required then it is acquired from rubber factory, then there is also plastic factory, which produces PVC for Bata shoes. After production, the finished products then go to Bata Laboratory, where they are checked for the desired quality, and then finally shoes go to Bata owned retail stores for the customers. After seeing all their operations and activities like forecasting, purchasing raw material, production, costing,

Quality control, and distribution, we can say that BSO is carrying out its all operations very well, because they are achieving what they desire and they are still in the growing phase, they are still growing their customers, and all of their methods for carrying out different activities and operations are efficient and effective, like while purchasing raw materials they analyze all their alternatives, and select the best from those, and forecasting methods they use are in accordance with the type of business they are in, as they use seasonal indexing method for forecasting the demand. And finally, they dont have any distributor as they have their own retail stores.