1. introduction to the report

3. ORGANIZATIONAL STRUCTURE

An organization can be defined, in the words of Stephen.P.Robbins and Mary Coutter as:

“An organization is a deliberate arrangement of people to accomplish some specific purpose or objective.”
PTC has a national network with its head office located at Evacuee Trust Complex Agha Khan Road F/51 Islamabad. Moreover it has five Regional Offices for the five regions into which it has divided the whole country. These regions include:

1. 
   Central Punjab with Regional Head Office in Lahore
   
2. 
   Southern Punjab with Regional Head office in Multan
   
3. 
   Upper Sindh and Baluchistan with Regional Head office in Lahore Sukhar
   
4. 
   Lower Sindh with Regional Head Office in Lahore Karachi
   
5. 
   North Region with Regional Head Office in Lahore Rawalpindi
   

Pakistan Tobacco Company has its own organizational structure that comprises of three categories, one is workers, second is business support officer (BSO) and third one is Member of Management (MOM). Its organizational structure is very effective and is used widely. It supports managers to achieve their targets.

There are total 63 managers in the Akora Khattak factory, which are distributed as under:

• 
  Managers working in production area.
  
• 
  Managers working in leaf area.
  
• 
  Managers working in the GLT Plant.
  
• 
  Managers working in the Laboratory.
  

There are 15 managers who are called HOD’s (Head of Departments) and they are also known as supervision managers.

PAKISTAN TOBACCO COMPANY – AKF ORGANOGRAM



Chart 3.1 Organogram of PTC, AKF (Source: Syed M. Aamir BSO, HRD)

3.1 DEPARTMENTATON
The Pakistan Tobacco Company Akora Khattak Factory consists of the following major departments:

1. 
   The Security Department
   
2. 
   The Leaf & G.L.T (Green Leaf Threshing) Department
   
3. 
   The P.M.D (Primary Manufacturing Department )
   
4. 
   The S.M.D ( Secondary Manufacturing Department)
   
5. 
   The M.M.D (Materials Management Department)
   
6. 
   The Engineering Department
   
7. 
   The H.R.D ( Human Resource Department)
   
8. 
   The Finance Department
   

Besides these mentioned departments there are also some other small departments these are as follows:-

1. 
   The I.T Department
   
2. 
   The Filter Rod Department
   
3. 
   The Research and Development Department
   
4. 
   The Training Center
   
5. 
   The LRC(Learning Resource Center)
   

Their details are as follows:

3.1.1 THE SECURITY DEPARTMENT
3.1.1.1 Mission Statement:-

“As a business an integrated functions to add value by ensuring that people, assets, vital information and operational activities are protected and as part of multifunctional management team contribution to achieve the company’s goals and objectives.”

3.1.1.2 Major Services Provided:-

At P.T.C all the employees work like a security team. There is companywide awareness that every employee is responsible for his own territory and safety. Yet the importance of the security department can not be under stated. It provides the following major security services:-

1. 
   Risk Identification
   
2. 
   General Security
   
3. 
   Fixed Asset Monitoring
   
4. 
   Fire security
   
5. 
   Access control
   

1. 
   Risk Identification
   

Security policies are made to check the risk of theft. In this regard a policy for each area is developed according to its risk. Then a relatively tight security is maintained at the more risky areas. Moreover the security management staff evaluates the risk policies from time to time and also develops new policies according to further risk identifications.

2. 
   General Security
   

The security department is responsible for keeping a vigilant eye on all those objects, persons, and vehicles that enter into the premises of the factory. For this purpose there is a CCT (Closed Control Television) system on the main gate. Through the C.C.T the plate no. and the lower surface of the vehicle can be easily seen. There are also guards men standing on the out and in gates to check the individuals going into or out of the factory.

3. 
   Fixed Asset Monitoring
   

The fixed assets too are properly monitored as and when they are being moved out or in to the company to ensure safety and security.

4. 
   Fire Security
   

The major and basic responsibility of the security department is to combat any type of fire situation. There are mainly three types of fire defense systems developed by the Security Department of P.T.C (A.K.F) i.e.

1. 
   Fire Extinguishers
   
2. 
   Fire Hydrants
   
3. 
   Fire Brigade
   

5. 
   Access Control
   

The security department is also responsible for controlling the access of people to the sensitive areas of the factory e.g. cigarette factory, generator room and administrative offices. For this purpose they have introduces the concept of access cards for opening the doors of certain offices. This card is given to only authorized persons.
3.1.2 THE GREEN LEAF THRESHING DEPARTMENT (G.L.T)
3.1.2.1 Mission Statement:-

“Process and deliver quality tobacco satisfying changing customer demands at optimum supply chain cost ensuring continuous development of processes and people.”

3.1.2.2 The GLT Process:-

GLT stands for Green Leaf Threshing. It is the first step in the processing of tobacco leaf. It is basically used for threshing of tobacco and its separation into lamina and stem which are then sent for further processing to Primary Manufacturing Department (PMD). The overall processing of tobacco in the GLT can be summarized under the following three headings.

1. 
   Initial Conditioning:-
   

The GLT plant receives tobacco from the Leaf Logistics Office (L.L.O) where the tobacco is put on the tipping tables and cut into pieces. After that Tobacco goes through conditioning cylinder where it is given moisture from 15% to 16% and at a temperature of 60C°-65C°. After that process tobacco is shifted to cindery, where scrap is filtered from whole tobacco this is a manual search including 12 to 14 persons picking the unrelated materials from tobacco. Then it is again passed through another conditioning cylinder and moisture from 17% to 18%so as to recover the moisture lost during the searching stage.

2. 
   Threshing and Separation Stage:-
   

After proper conditioning the tobacco is taken through auto feed to the first thresher and classifier chamber where tobacco is split into stem and lamina. This separation is in fact a continuous process in which the tobacco passes through 5 threshers and classifiers. On the way the Suction force takes up the light parts, mostly lamina, to a dryer section. In the dryer section the tobacco is evenly dried and moisture. The lamina and stem are dried moisture at different temperatures i.e. lamina MC11-12.5% at 40-43C° and stem MC 10-11% at 40-45C°. After re-drying lamina is packed into CBC and stem into gunny bags. The net weight of CBC is 200Kg and the gunny bags are 35Kg.
3. Godowns:-

After packing the stem and lamina are kept into cooling storage for 72hours and transferred to the PLS (Prize Leaf Storages). There are 23-25 different Godowns in PTC. The tobacco is stored in these godowns till the demand from the PMD. When the PMD demands for tobacco the required quantity and quality of tobacco is issued to the C-5 godowns of the PMD.

3.1.3 THE PRIMARY MANUFACTURING DEPARTMENT (PMD)
3.1.3.1 Mission Statement:-

1. 
   “To provide the secondary department with the best valued product in order to gain their respect
   
2. 
   Pursue continuous improvement of performance to best international standards in all operating and end market companies.
   
3. 
   Achieve a high level of Environment Health & Safety performance above local levels and according to the BAT standards”
   

3.1.3.2 The PMD Process:-

In the primary manufacturing department tobacco is passed through a series of conditioning and cutting process and made ready for filling into the cigarettes in the Secondary manufacturing department.

The PMD process consists of the following steps:

1. 
   Leaf Reception
   
2. 
   Conditioning
   
3. 
   Casing
   
4. 
   Cutting
   
5. 
   Re-drying
   
6. 
   Storing/Filling
   

3.1.3.3 Leaf Reception:-

At first stage in the PMD an operation wise demand is sent to the leaf department which then issues the required quality and quantity of tobacco, according to proper grade formula from the C-5 godowns .this tobacco from the c-5 godowns enters the Leaf Reception Room (L.R.R) in PMD where it is reweighed and checked for grade. After reweighing these bags and CBCs are sent for separation i.e. separation into stem and lamina. After that, the tobacco is assigned proper codes, batch No’s and operation No’s & date etc and entered into operation.

3.1.3.4 Conditioning:

There are two lines of operations in the PMD i.e. one for each of the stem and lamina both of which are treated separately. At each of the two lines first the tobacco is passed through moisture conditioning and then forwarded to a cylinder called the Direct Conditioning and Casing Cylinder (DCCC) for conditioning and casing purposes, where lamina is given Moisture Content (MC) of about 20-22% at a temperature of 65C°while stem is given MC of about 36%-38% at a temperature of 90-95C°.

3.1.3.5 Casing:

Casing technically refers to all those chemicals that are sprayed over tobacco. There are three main purposes of spraying casing over tobacco

1. 
   Flavoring
   
2. 
   Moisture retention
   
3. 
   Irritancy reduction / preservation.
   

The chemicals used as casing are properly approved from the head quarters according to the BAT and PTC standards. E

ach brand has its own formula for the preparation of casing. These chemicals include Gralantor, Kookie, and Durlock etc.

In the PMD there are three different types of pots containing three different types of casings. Their details are as follows:

1. 
   Pot 1 for (Gold Flake & Wills Navy Cut)
   
2. 
   Pot 2 for FCV and all Blends
   
3. 
   Pot 3 for DV/WP and Blends CL & CH i.e. (Embassy & Embassy King)
   

3.1.3.6 Cutting:

The tobacco after blending goes through to the RC-4 Cutter Machine for cutting. Here the operator of the machine manually selects the individual processes. The RC-4 Cutter cuts the lamina at a rate of 28 Cuts per Inches (CPI) while stem at 160 CPI.

3.1.3.7 Re-drying:

The tobacco after being cut through RC-4 cutter is then taken by suction auto-feed into the HT Dryer Tunnel. In the HT Tunnel the tobacco is dried with the help of steam at a temperature of 135C°.thus the moisture content of tobacco is brought down to about 14-15.

3.1.3.8 Storage/Filling:

After passing through separate dryers both the lamina and stem get equally dried. Both the stem and lamina are then combined through conveyers and then passed on to the three Final Product (F.P) Silos in the Cut Tobacco Stores (CTS). Each FP Silo can store up to some 5000kg of cut tobacco. This tobacco is then filled into 1meter wooden cube boxes each weighing 160-175kg, for carrying to the suction feeders as per Secondary Manufacturing Department’s demands. The composition of this cut tobacco is 19-21% of stem and some 79 -81% of lamina.

3.1.4 THE SECONDARY MANUFACTURING DEPARTMENT (SMD)
The main functions of the Secondary Manufacturing Department are:

• 
  Making of Cigarettes
  
• 
  Packing of Cigarettes
  

3.1.4.1 The Secondary Manufacturing Process:-

From the C.T.S (Cut Tobacco Stores) the tobacco is taken into the SMD through suction multifeeders. There are eight (8) multifeeders (i.e. multifeeders Mk1----Mk8) each for one of the eight MAK 9 machines in the SMD. In SMD each MAK 9 machine wraps the tobacco into cigarette paper. The cigarette paper’s role is called BOBBI. Each BOBBI has a length of some 6000m and is converted into 67,500 cigarettes. After that the cigarette rod is manufactured and cut into parts of cigarettes each having an average weight of 1.95g.then these cigarette parts are transferred to the linkup machine that attaches the filter rods to the cigarettes with the help of tipping paper and gum. After that the cigarettes are transferred to the packing side where first the cigarettes are arranged into 10s & 20s and then the HLP machines with various speeds (i.e. HLP4, HLP225& HLP250) pack the cigarettes into inslets of aluminum foils. Then the cigarettes are packed into flats or shells after which the poly propylene cover and tear strips are mounted over these shells through the GD435 machine. After that these packs/shells are sent through conveyer belts to another machine that packs them into CBCs (i.e. corrugated board cartons).each CBC of 20’s contain 1000 cigarettes and have a weight of about 14 kg. These CBCs are then sent to the RG1 godown where the excise and taxes are paid on each of these.

2. 
   Production Capacity of SMD
   

The production rate and speed of the SMD depends upon the Master Production Schedule (i.e. MPS). When the market demand increases the SMD tries its best to meet that as soon and completely as possible. That’s why five years ago it achieved a record production of 1.539 billion cigarettes. In March 2005 it broke its own record by producing 1.565 billion cigs. Recently in April 2005 the SMD scored yet another record of producing 1.630 billion cigarettes, hence making it possible for the PTC to meet its customer’s demand at the right time.

3.1.5 THE MATERIALS MANAGEMENT/FACTORY SUPPLY CHAIN DAPERTMENT (MMD/FSCD)
3.1.5.1 Mission Statement:

• 
  To be a key contributor in company mission
  
• 
  To strive for quality exceeding customer’s expectations by providing overall superior service & optimum value for money in all that we produce
  
• 
  As a key parameter to achieve this end, become the preferred business parameter for our suppliers”.
  

This department was formerly called Materials Management Department (MMD), but now its name and functions has been changed to Factory Supply Chain Department (FSCD) and is soon to be changed yet again to Supplies Relationship Management (SRM).

The department deals with all the in-coming and out-going materials. The materials to all the departments are issued through MMD. It purchases both local and imported materials on behalf of the Head Office. It also controls the inventory of manufacturing and marketing departments in terms of specification as well as quality.

The department uses the FIFO (i.e. FIRST IN FIRST OUT) method for inventory disposition, while the costing of the inventory is done by the finance department.

3.1.5.2 Sub Departments of MMD/FSCD (Factory Supply Chain Department)

The MMD/SCD operates through the following sub departments:

1. 
   Bailing Material Store (BMS)
   
2. 
   Wrapping Material Store (WMS)
   
3. 
   Shipping Material Store (SMS)
   

A) The Bailing Material Store (BMS)

This store mainly deals with the raw materials. The leaf and stem coming from the leaf depots and the Prized Leaf (i.e. the leaf processed in the GLT) has to be packed for sending it to the PMD. The packing material used for this purpose is called the CBC (Corrugated Board Carton) and is stored in the BM Store. These CBCs are imported from Brazil and are thus very costly. Thus the BM store ensures that each CBC is used for about 4-to-5 times, before they are auctioned, in order to overcome the effect of high cost. In addition, this department is also responsible for the auctioning of scrap materials.

B) The Wrapping Material Store (WMS)

This department arranges all types of wrapping material used in the cigarette manufacturing process. The major wrapping materials used in the manufacturing process include the following:

Table 3.1

Wrapping Materials Used In Cig: Manufacturing

SUPPLIER	ITEM/S SUPPLIED
M/S PDM FRANCE	CIGARETTE PAPER/TIPPING PAPER
M/S DIACEL JAPAN	ACCETATE TOW
M/S SWIFT ADHESIVES	ADHESSIVE
M/S EXON MOBILE	POLYPROPYLELNE
M/S BIG BEARD	TOR
PACKAGES LTD	PACKAGES
M/S APIL	ALUMINIUM FOIL
M/S CENTURY PAPER BOARD	BOX BOARD

(Source: Mr. Kamran Mehmud BSO, FSCD)

There are two types of godowns with this store; one is the custom-boarded godown and the other is non-custom boarded godown. The arrivals to this department are dually GR- sheeted that means that the correct amount of inventory in stores is o the record.

C) The Shipping Material Store (SMS)

All the finished goods are brought to this store from where the goods are shipped to the market on demand. The duties and other government levies on cigarettes are also paid here. This store was also called excise bonded ware house because the cigarette excise was paid here. but this year effective from July, 2005, the government has changed the excise payment structure. Now the excise will be payable at the time of sale along with the sales tax at the various warehouses of the company.

The CBC cartons full of cigarettes are entered into the store through electronic forklift trucks from the RG-1(Receipt Godown-1). These CBC packs are then sent to the various warehouses of PTC allover the country as and when demanded. The major warehouses are situated at Peshawar, Islamabad, Sargodha, Multan, Jhelum, Sahiwal, Karachi and Hyderabad. The storage capacity of this store is about 130 million cigarettes.
3.1.5.3 The Factory Supply Chain Department Office:

In the FSCD office its staff deals with the arrangement and procurement of Direct and In-direct materials for the factory. The procurement of direct materials is done through Vendor Inventories Management System (VIMS), except computers that are dealt with by the Head Office. While on the other hand the indirect materials procurement is done through Indent Forms. For this purpose the department calls on its suppliers, normally enlisted with the office the suppliers then send their quotations to the office and then finally the office selects the suitable suppliers for a period of one year.

Some other matters that are dealt in the supply chain office include: Carriage contracts, Leaf godowns, Piece rate contracts, Factory Transportation for employee’s pick & drop and Factory Ambulance services etc.

3.1.6 THE ENGINEERING DEPARTMENT
3.1.6.1 Mission Statement

“To provide engineering services with sped and flexibility, by means of passionate and skilled people to PMD, SMD, GLT and leaf area, hence enabling them to deliver quality products at a minimum supply chain cost.”

3.1.6.2 Engineering Services/Items Provided By the Engineering Department:
The engineering department is concerned with all the engineering items and services in the factory. The major engineering items/services provided by the engineering department include;

• 
  Boiler house
  
• 
  Electrical side
  
• 
  Air conditioning
  
• 
  Vehicles
  
• 
  Engineering store
  
• 
  Telephones
  
• 
  Generators
  
• 
  Compressors
  

Some of these services/items are provided by the company’s own employees while others are arranged through the contractors that are normally registered with the company.

The purchase of the engineering items/services is the responsibility of the engineering department. A purchase of amount up to Rs 25,000 is recorded in the Petty Job Book. For a job ranging from Rs 25,000 to Rs 50,000 a receipt called Gen-50 is prepared. While for only a job amounting to Rs 25000, a receipt called the Gen-81 is prepared.
3.1.6.2 (A) The Engineering Store:

The engineering store is used for only the engineering related items. There are about 17,000 items in this store and each item has its own specified location where it can be easily located. Moreover, the engineering items/spare parts have been divided into three categories: Local items, Foreign/imported items and Propitiatory items

3.1.6.2 (B) Oil Store:

It is a part of the engineering store where the oil used by the company’s vehicles. The oil is issued on daily basis (from 9:00 am to 10:00am) after or before this time the oil issued only in exceptional cases.

3.1.6.2 (C) Receipt of Items

When fresh engineering items are supplied to the Factory, a BSO in the Engineering Store receives them. A special sheet called the Goods Received Sheet (G-R Sheet) is then prepared for such items. One copy of the G-R Sheet is handed over to the person who passes the bill and one copy to the BSO for store record purposes.