Final Abid

Khokar Engineering Works

Internship Report Khokhar Engineering Works BBA Program Summer 2009

Submitted To Prof. Nisar Ahmad By Muhammad Abid Sultan University of Central Punjab, PCBA-PICS

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L1F05BBAM0001

Table of Contents

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Acknowledgement: Words will never be able to express enough, our fevering gratitude to almighty Allah, the most compassionate and merciful, for giving us the courage

and

fortitude

to

accomplish

this

enormous

task.

We

acknowledged that the Holy Prophet’s (PBUH) moral and spiritual teachings have enlightened my heart and mind and have guided my thoughts towards new horizons enriched with great ideas of life. I am grateful to our teacher Mr. Nisar Ahmed for guiding us so very well that I am able to compile my internship report. I pay my regard to Mr. Emran Khokhar the Project Manager for helping throughout my internship and making my internship experience ever so exciting and for training me & exposing me to the work environment so that I can learn the working of practical life. I also pay our heartiest gratitude to all those who were a great help in completing this report.

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Executive Summary

The purpose of this report is to fully understand the working of KHOKHAR ENGINEERING WORKS. KHOKHAR ENGINEERING WORKS started to its business in 1978 in Lahore, Pakistan. I have analyzed the whole firm’s procedure and understood the work environment of the firm. In this report, I’ve incorporated all the business functions and product details of Khokhar engineering works. Apart from that detailed description of all the different departments

is

provided

in

the

report,

SWOT

analysis

along

with

recommendation and suggestion for firm improvement are also included. Khokar Engineering Works is a fabrication and engineering solution providing firm. In the early years of business the main contracts that KEW got were one of Pakistan Railways, Engineering solutions for construction structure and fabrication of steel structures. KEW also had the privilege of working for government, semi government and many major private projects. During my internship period I worked in the procurement department concerned with the timely supply of raw material according to customer orders. University of Central Punjab, PCBA-PICS

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Industry Profile: History of Manufacturing Industry: In 1947 only some 5 percent of the large-scale industrial facilities in British India were located in what became Pakistan. The country started with virtually no industrial base and no institutional, financial, or energy resources. Three small hydroelectric power stations provided limited electricity to a few urban areas. Firewood and dung were the main sources of energy; commercial energy sources supplied only about 30 percent of the energy consumed. Further, there was a shortage of management personnel and skilled labor. The pace of industrialization since independence has been rapid, although it has fluctuated in response to changes in government policy and to world economic conditions. During the 1950s, manufacturing expanded at about 16 percent annually; during the first half of the 1960s, it expanded at around 11 percent a year. The pace slowed to fewer than 7 percent a year in the University of Central Punjab, PCBA-PICS

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second half of the 1960s. Between FY 1970 and FY 1977, the index of manufacturing output increased an average of only 2.3 percent a year. Between FY 1977 and FY 1982, the index raised an average of 9.9 percent a year. Growth averaged 7.7 percent during the Sixth Five-Year Plan (1983-88) and 5.4 percent from FY 1989 through FY 1992. In FY 1993, manufacturing accounted for 17.3 percent of GDP at current factor cost, of which large-scale manufacturing accounted for 61 percent and small-scale manufacturing for 39 percent. Manufactured goods accounted for 64 percent of all exports by value in FY 1993, but the bulk of these exports came in the relatively lowtechnology areas of cotton textiles and garments.

Total fixed capital formation in manufacturing was estimated at Rs57 billion in FY 1993. During the 1980s, private investment became much more important than public investment. In FY 1982, private investment was 53.9 percent of the total, but in FY 1993 the proportion was 96.1 percent. Total investment in manufacturing was 5.1 percent of GNP in FY 1993. In the early 1990s, the manufacturing sector was dominated by food processing and textiles. Provisional figures for FY 1992 indicated that sugar production was 2.1 million tons, vegetable ghee 819,000 tons, cotton yarn 862,000 tons, and cotton cloth 234 million square meters. Other industrial products included motor tires (647,000 units), cycle tires (2.2 million units), cement (6.1 million tons), urea (1.4 million tons), soda ash (147,000 tons), bicycles (364,000 units), and paperboard (13,000 tons).

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Pakistan has one steel mill, located near Karachi, with a production capacity of 1.1 million tons per year. A major undertaking, the mill required the bulk of public industrial investment in the late 1970s and early 1980s, although the plant was designed and partly financed by the Soviet Union. It produced at 81 percent of capacity in FY 1993, and it was dependent on imports of iron ore and coking coal. As of early 1994, the mill had not achieved sustained profitability, but there were plans to expand it. Public-sector firms produced about 40 percent of the total manufacturing value added in FY 1991, and they absorbed about 48 percent of gross fixed investment. The total value of public sector industrial output in FY 1991 was Rs36 billion (in constant FY 1988 prices), but pretax profits were only Rs1.3 billion, reflecting the inefficiencies and overstaffing prevalent in these enterprises. To improve the efficiency and competitiveness of public sector firms and end federal subsidies of their losses, the government launched a privatization program in FY 1991. Majority control in nearly all public-sector enterprises will be auctioned off to private investors, and foreign investors are eligible buyers. In March 1992, twenty units had been privatized, but by 1993 only about 30 percent of the government's target number of firms had been sold because some of the enterprises were unattractive for private investors. In 1994 the government led by Benazir Bhutto was committed to continuing the policy of privatization.

Importance of Engineering Industry: Pakistan has the potential to enhance its share in international exports in the engineering sector, which is at present a mere $270 million per annum. University of Central Punjab, PCBA-PICS 7

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Pakistan must develop the engineering sector in order to get more shares in the world market which is worth $6 trillion per annum. Manufacturing Industry in Pakistan which has gone through a lot of sufferings due to inception of information and computer technology (ICT) and it has not been in practice in Pakistani Industry at large basis which might bring heavy loss in next couple of years. Both small or medium level enterprises and high level industries are striving hard to give maximum output with their best quality products. In this competitive environment neighboring country like China, India and far east countries are in the race to produce product at cheaper rates and in short time to meet the requirements of their customers. Thus Pakistani manufacturing sector is struggling to cope with the high standards of quality, keeping costs and/or prices at minimum level.

In this rapidly changing scenario data mining techniques can be exploited to predict their manufacturers needs and can reduce product time to market by maintaining the international standards as well. Data mining can help engineers and professional in the manufacturing sector to discover and analyze the weaknesses present in the manufacturing sector. With the applications of artificial intelligence techniques like data mining costs can be reduce to minimum with the increase in the quality of the products. Production rate can also be increased without compromising with the quality of the products. There is a need to train the engineering professionals to take advantage of modern data analysis techniques so that they can use their own experience and knowledge along with the machine learning algorithms

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to find out the complex relationships present between different controlling parameters.

Company Profile History of Khokhar Engineering Works: Khokar Engineering Works started operation in 1978 as an engineering solution provider and fabrication company. The company name was modified after a year to indicate the abbreviated letters, KEW. In the early years of University of Central Punjab, PCBA-PICS 9

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business the main contracts that KEW got were one of Pakistan Railways, Engineering solutions for construction structure and fabrication of steel structures. KEW also had the privilege of working for government, semi government and many major private projects.

Overview: KEW is a partnership company founded in 1978 as Khokar Engineering Works. The company name was modified to KEW for ease of use. Initially the product range of the company was limited to Stainless Steel Equipment including Vessels and customized fabrication for the process industry. The company is unique in its resource base with in-house capabilities for Design Engineering, Manufacturing, Construction and Maintenance Services. These are applicable to a wide variety of projects related to Industrial plants, Energy and Infrastructure development for which services are provided selectively or on turnkey. KEW has the privilege of having many patent products which include patent plant installation for many paint industries, basket mills, sand mills. KEW has worked in collaboration with many well established companies in Pakistan, ICI and Berger to name a few. Another specialty of KEW is High speed dispersers, Multi shaft dispersers and solutions for ball mills. Drum tilting trolleys, filling machines; conveyers are among the list of many products that KEW readily manufactures on customer demand. After many years of increasing brand recognition tied with the expertise of the management team was leveraged to expand the manufacturing program to include carbon steel products including Fired Boilers, Heat Exchanges and Pressure Vessels and Ducting. Towards the mid-nineties customer concerns regarding increasing fuel costs were an impetus for another effort this time in energy efficiency. This is done through changes in design of regular University of Central Punjab, PCBA-PICS

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equipment. Hence following many other pioneering efforts in Pakistan in terms of Waste Heat Recovery Boilers was introduced by KEW. Now, after approximately a quarter of century of national industrial experience in heavy engineering and growing customer initiatives, KEW is shaping into a national market leader in Waste Heat Recovery Boilers and Waste Water Treatment Plants. In process of continuously striving for innovative engineering manufacturing solutions for the local industry, KEW has cultivated an extensive customer base that consists of multinationals such as Pepsi cola and other national famous brands such as ICI paints, Berger paints, Nippon paints, Kansai paints and Terrace chemicals. KEWTRONICs is sister concern of KEW which deals with the control panels and control system of industrial equipment. Electronic industrial equipment is an emerging market in Pakistan and holds great opportunity for business expansion.

Quality,

Health,

Safety

and

Environment

(QHSE)

at

DESCON University of Central Punjab, PCBA-PICS

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We understand the value of human life and sustainable development for healthy growth of a community. KEW’s QHSE program ensures these goals by exercising zero tolerance for errors in the implementation of best Industrial QHSE practices. These are supplemented with incentives, training, process control, and deployment of most effective time tested quality Improvement tools. Our strategy is built around plan, do, check and act and is reflected in our systems appreciating following key elements: •

Provision of a framework for the setting of QHSE Goals and performance objectives.

•

Monitoring, evaluating and continually improving upon our QHSE performance through operational standards, training, assessments and audits.

•

Making customers, contractors, and business partners familiar with our QHSE system and creating awareness on how their actions can influence QHSE performance.

•

Making QHSE a part of all product development projects.

•

Making ourselves, aware of the global industrial initiatives and collecting feedback from our stakeholders for taking improvement initiatives.

•

All of our operations submit to certified integrated management systems, which include ISO 9001, EN ISO 14001, and OHSAS 18001 and are run in accordance with national safety Council guidelines.

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Purpose Statement of KEW: To bring prosperity and well being to our stake holders and society at large by adding value through engineering, technology and management

Mission Statement of KEW: “To Provide Value added Integrated & Innovative Engineering Manufacturing & Turnkey Plant Construction Solutions by continuously adapting to Customer needs”

Vision Statement of KEW: To be the premier organization operating locally that provides the complete range of engineering solutions & services to all customers under one roof.

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Core Values: Khokhar Engineering Work aims to instill a fostering and stimulating culture based on providing a safe, healthy and supportive environment where staff members are valued, respected and able to realize their full potential. This culture is based on the following core values:  Humility  Extreme Customer Care/Focus  Courtesy and Respect  Honesty, Integrity and Trust  Commitment and Hard work  Creativity, Innovation and Quality  Justice and Fairness to all Stake-Holders  Open, Honest and Direct Communication  Provider of growth and equal opportunity

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Management Structure:

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Products and Services:  Oil & Gas Process Equipment  Paint Process Equipment  Smoke Tube Fired Boilers  Waste Heat Recovery Boilers  Waste Water Treatment Plants  Engineering Services  Hot Water Generators  Heat Exchangers  Stainless Steel Fabrication Equipment KEW in Oil & Gas Sector KEW offers its design & fabrication services to companies for their requirement of the following type of equipment in the oil & gas sector. Similar type of equipment is stainless steel or higher alloys for chemical, fertilizer and similar process industries can also be offered.  three phase test & production separators  low temperature separators  de - ethanizer column  flare knock out drum  de - ethanizer o.h. drum

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Smoke Tube Fired Boilers KEW is among the engineering & fabrication companies manufacturing steam boilers to British standard bs 2790:1992. Kew manufactures boilers in the following capacities & pressure ratings. Capacity: 2tph to 32 tph, capacities beyond 20 tph utilize twin flue design. Pressure rating up to 25 bars (g) (depending upon capacity) Waste Heat Recovery Boilers KEW also manufactures waste heat recovery boilers through out Pakistan. For engines up to 105mw capacities are offered in simplex, duplex, or triplex up to 25 bars (g) pressure design providing a cost effective solution. For natural gas & HFO fired engines from 3 mw to 6 mw range the simplex design is preferred. Engineering Services The company has an experienced in-house design and drafting team that employs advanced software for pressure vessel design and for producing accurate specifications and drawings that meet international standards. Some typical design services provided include:  Pressure Vessels  Heat Exchangers  Columns  Jacketed Vessels of Limpet Coil Design University of Central Punjab, PCBA-PICS

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 Packaged Fired and Waste Heat Recovery Boilers  Packaged Sewage / Industrial Waste Water Treatment Plants Design & Detailed Engineering Services are provided as a stand alone service as well.

Engineering Units of KEW Here’s how different units of the firm are divided according to work load and engineering type. Basic Engineering: Process Simulation Heat and Material Balances Process Flow Diagrams (PFDs) Piping and instrumentation Diagrams (P&lDs) Utility and Effluent Summary Hydraulic Calculations Heat Exchangers Thermal Design and Rating Equipment Sizing Process Data Sheets Cause and Effect Diagrams Detailed Engineering: P&lDs (AFD to AFC) Utility Distribution Diagrams University of Central Punjab, PCBA-PICS

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Fire Protection Systems Pressure Relieving. Flaring, and Depressurizing Calculations Operations Manuals (compilation) As-Built P&IDs

Piping Design The piping design group specializes in the following: Plot Plans Conceptual Piping Studies and Layouts Piping Plans Isometrics Project Specifications / Procedures Bill of Materials / Bill of Quantities Mechanical Design The mechanical design group provides specifications, material selection, mechanical design, detailed engineering, and shop fabrication drawings for: Pressure Vessels Heat Exchangers Process Related Mechanical Equipment Storage Tanks and Silos LPG Road Tankers

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Electrical and Instrumentation Design (KEWTRONICS) Wide range of electrical and instrumentation (E&I) design services are provided. Electrical Design Area Classification Drawings Single Line Drawings Schematic and Wiring Diagrams Specifications and Data Sheets Cable Layouts and Routing Diagrams Communications Systems Fire Alarm Systems

Heat Tracing Systems Instrumentation Design Instrumentation Specifications and Data Sheets Logic / Loop Diagrams and Termination Drawings Hook-up and Installation Drawings Control Room layout and Arrangement Drawings Panel Specifications and Arrangement Drawings DCS and ESD Specifications Control Valve and Orifice Plate Sizing Civil Design The civil design group specializes in the following: Modeling using PDS Steel and Concrete Structures University of Central Punjab, PCBA-PICS

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Highways Industrial Facilities and Process Buildings Pipe Racks, Table Top Structures, and Elevated Structures Warehouses Bridges and Culverts Equipment Foundations Pile Foundations Tank Foundations Compressor and Turbines (including dynamic analysis) High Rise Buildings Elevated and Underground Tanks Underground Services for Plants

Business Sectors Served •

Power

•

Oil & Gas

•

Cement

•

Power Generation

•

Pharmaceutical

•

Petrochemical

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Khokar Engineering Works

•

Chemical

•

Food & Dairy

•

Sugar

•

Automotive

•

Pulp & Paper

•

Hospitality

•

Beverages

•

Textile

•

Polyester

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Business Process Order Finalizing The first step in the business process is that the customer orders whatever it demands and the order is reviewed and finalized by a panel of expert team. The order finalizing step works in three short steps. •

Customer meeting with engineer regarding order.

•

Order review and post-planning by team.

•

Finalizing of order.

Purchase order After order finalizing the client issues a purchase order regarding the product it wants KEW to manufacture.

Administration The next step in the business process is that after Purchase order is finalized by the client then the whole requisition is sent to the administration department which in turn develops a course of plan to work on the project.

Finance & Purchase In this step the over financing and purchasing of the project is developed and all the relevant requisitions for material and labor are finalized. All the lists of specified raw material is made and sent to the store department.

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Store After getting the lists of material needed collects all the raw material and also collaborates with the finance department for purchase of any new material during the project.

Workshop After all the material is collected and purchasing has been done the project moves to the workshop where the panel makes several blue prints of the product and shapes it according to the customer demands.

Fabrication The fabrication process has the most crucial job of fabricating the final product. In this step the material is shaped into a product that is inline with the customer order.

Fitting The fabrication department makes the product and sends it to the fitting process for completion.

QC This process ensures that the final product is up to the mark and comes up to the quality standards of KEW. There are many different methods for Quality check which vary from product to product. University of Central Punjab, PCBA-PICS

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Store- for delivery After Q.C the product is sent back to the store where it is assigned for delivery.

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Departments in KEW Projects Department: This department deals with all the customer demands and product details and the major planning regarding the final product are blue printed in this department. The entire engineering work force in this department works on providing the best possible solution to any problem or demand aroused by the customer.

Store Department: After the detailed blue print is designed the company refers the details of the project to the store department so that the store department can collect all the required equipment for the project. Apart from project based equipment the store department also manages inventory for any other raw material consumed by the firm.

Purchase Department: The purchase department works in collaboration with the store department and the accounts department. The purchase department is evoked by the store department and requisitions are sent to the purchase department by the store department to purchase all the required equipment and inventory. The purchase department has to collaborate constantly with the accounts department.

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Design Department: The design department is the backbone of the whole fabrication and engineering process, in this department the entire customer demands are shaped into final products and the design department constantly works on R&D to make the products better and cost efficient.

Administration & Personnel Department Administration & personal department deals with the overall matters of the firm and takes different actions for increasing the performance of the company. This department also carries out different benefits programs.

Sales / Marketing Department This department makes different efforts to increase the sales of the company by sponsoring different social programs and by advertising their products. Sales department keeps a complete record of invoices and pack lists. After receiving the order, it enters the order in the layout and checks the codes, description, prices and then confirms the order. After that it issues planning to the Assembly department for further issuance of the product to the supplier. After completing all the required steps the product is issued to the customer within the time limit.

Finance Department It deals with the financial matters of the company. It collects the revenues and makes different payments and maintains proper record of the financial University of Central Punjab, PCBA-PICS

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performance of the company’s business to show the net result in the form of either profit or loss. Finance department is one of the most important for the company because it deals all the cost and finance related matters for the company.

Accounts Department Accounts department is one of those departments which have no customer dealing at all. The staff working in this department has to keep a check on day to day task and send the report to the head office. Brief detail of accounts department is provided below.

Procurement Department: The Procurement function is driven by the objective of procuring materials and equipment in time from the best possible sources according to the specifications and requirements. We strive to buy cost-effectively and ensure deliveries to meet project schedules without compromising on quality. The basic elements include: •

A team of trained procurement experts who are constantly seeking best sources.

•

A comprehensive data bank of suppliers and vendors available online for internal users.

•

A central IT based expert system which integrates various stores, procurement and finance.

•

Pre-qualification of vendors and review evaluations on regular basis.

•

All import/export and customs clearance activities and guidance to customers for specific shipments.

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•

Documentation for opening LC’s and remittances.

Quality Control: The quality control department is constantly on the look out for any flaws and quality checks in the products. At KEW quality is taken seriously and many methods have been incorporated to control quality. KEW Boilers and Pressure Vessels are tested & inspected in accordance with the ASME code Section I & III Division I. Boilers which are manufactured according to BS 2790 required third party Inspection with the stamp of the Chief Inspector for Boiler and Pressure Vessels, Boiler Inspection Wing, directorate of industries, Pakistan. A complete data dossier, (containing all drawings, manufacturing data reports, inspection & test reports, NDE Reports, third party certificates, and all related documents) is handed over to the customer on completion of fabrication of boiler or pressure vessel.

Quality Assurance: KEW emphasizes a quality conscious culture and is committed to continuously improving its processes. The quality management system at KEW comprises of a quality policy, quality manual, documented procedures, work instructions and quality records. All activities are documented, traceable and regularly monitored for compliance. In KEW, "Quality Assurance" is more than just a term used to represent University of Central Punjab, PCBA-PICS

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inspection of a part or completed product. Quality Assurance is KEW’s total commitment to provide for the customers, the best products and services available in the industry to meet their needs and exceed their expectations.

SWOT analysis

Strengths: •

KEW has patent rights for manufacturing plant equipment for many paint industry.

•

KEW specializes in carbon steel structure.

•

KEW has the privilege to have state of the art water purification plant manufacturing facility.

Weaknesses: •

KEW being and engineering firm doesn’t focus on Electrical control panels, Control panels is a big market so lack of focus on this line has cost them a lot.

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•

KEW major weakness is that it does not have the facilities to work onsite for customers.

•

KEW has very low running capital.

•

KEW has not expanded well as compared to its competitors.

•

KEW doesn’t advertise its products.

•

Marketing techniques are very poor.

Opportunities: •

Food processing units and plants equipments manufacturing is a big opportunity to cash on in the present situation.

•

Electric control panels and electric services are a big market and opportunity for KEW.

•

Expansion of business internationally, or undertaking international products can be a plus but KEW has low capital.

•

Exploration & Production (E&P) companies are relentlessly pursuing new ventures into deep so working in collaboration with those firms can be a big profit seeking and expansion opportunity.

Threats:

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Khokar Engineering Works

•

China products are one of the biggest threats to any engineering firm in Pakistan.

•

Price fluctuations in terms of steel and other raw material pose threat to the business.

•

Inferior raw material and imports of expensive raw material poses serious threat to the business.

•

Law and Order situation of Pakistan In current years is a big threat to any business in Pakistan.

Problems/ observations: During my internship period with KEW I worked hard to isolate firm’s real issues and problems that were proving to be a hindrance in its success and according to my observation KEW face’s the following problems. •

The biggest problem that KEW has is that it has no proper infrastructure even after being in the business for 30 years. Although the different departments are working properly but still a well planned infrastructure can provide better services and help KEW with its expansion.

•

Another major flaw with KEW is that it has a very low running capital which is a big draw back because with a good amount of running

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capital KEW can pursue new venture like on-site working and international sales. •

KEW’s marketing department virtually doesn’t exist and it has done nothing to advertise the company.

•

KEW’s facility is big enough to support the business. The firm site is not big enough.

•

KEW doesn’t have good employee incentive programs and KEW’s HR department is not developing any plans that can support employee development and training.

•

KEW is basically a family owned business and most of the top management consists of family members, KEW should also have some non-family managers in the top management with more experience and market exposure.

•

Kew has no Web Site and Kew doesn’t maintain proper record books which is a big issue.

Suggestions & Recommendations: During my internship period with KEW I noticed firm’s real issues and problems that were proving to be a hindrance in its success, I’ve discussed the problems and here are the recommendations from my side to KEW for improvement of their business. University of Central Punjab, PCBA-PICS

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Khokar Engineering Works

•

In the current business situation and economic progress in the industrial sector KEW should expand its business and manage it in a way that it can work both nationally and internationally. Engineering firms are Major contributors to the economy of Pakistan and government is issuing many benefits to this sector so its time KEW should cash in on the opportunity of horizontal expansion.

•

As I discussed in the problems that KEW has poor infrastructure and poor marketing techniques so I suggest that KEW should get expert help in maintaining a proper infrastructure and it should start advertising it self.

•

KEW should have a proper advertising channel, at present KEW does not even owns a web site so I would suggest KEW to make a web site for ease of customers and advertisement.

•

KEW has its head offices wedged in between the already small engineering facilities because of that there are many risks. My suggestion to KEW is to make separate head offices.

•

Customer relation is one of the most important assets for the company, so KEW must have a proper and separate office for customer relation and their care. So that customers can easily approach to the company and its products.

Conclusion

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I found KEW a good place to work in as an intern. KEW provided me with the opportunity to put what I’ve learned during my studies to practical use and effectively polish my skills. KEW gave me an in-depth idea of the professional world, and gave me a chance to testify my self that how good I am in real term business culture. Working with highly qualified, experienced and motivated employees was truly an opportunity of its own kind. KEW has really helped me in gaining enough understanding of work place ethics, day to day dealing and KEW has taught the art of professionalism. Meeting new people, making friends, it was just a bi-product of all the experience I got. I had always been interested in manufacturing firm jobs the opportunity to work with KEW which is an engineering based manufacturing firm was all too exciting and challenging for me. The whole team I worked with at KEW had been very supportive of me and helped through all the difficult tasks and made me learn all the basics of working in such a competitive environment. I would also like to take this opportunity to thank KEW and my manager Mr. Emran Khokhar for providing me the opportunity to work with KEW.

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Bibliography www.wikipedia.org http://www.engineeringindustry.info/ http://www.pakistan.gov.pk/divisions/industriesandproduc tion-division/media/oppworkshop.pdf http://www.brecorder.com/index.php?id=944327 http://www.iaeng.org/publication/WCECS2008/WCECS200 8_pp787-792.pdf

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