1. INTRODUCTION

One of the objectives of entrepreneurship is to achieve the maximum production at the lowest cost. This can be ensured only through proper production planning and control. In this regard production management is very much concerned with the effective use of production capacity utilization of the unit [1]. Production control is essentially a device to implement a production plan. It deals with the collection of facts, comparison of results with the planned objectives and decisions to conform to the plan or to revise, if necessary [2]. There are certain causes which directly affect the utilization of proper/ smooth production capacity viz:

(Cramped atmosphere, Non implementation of scientific methods/techniques, Unawareness of managerial trainings and insufficient education). These causes can be rectified by the entrepreneurs themselves.

(b) External Causes

(Power problems, financial problems, High rate of markup, insufficient raw materials) [3]. These causes can not be rectified by the entrepreneurs themselves alone but they need government support in this context. Studies have revealed that well qualified and technically qualified entrepreneurs utilize maximum production capacity as compared to less qualified entrepreneurs [4]. The business experience of entrepreneurs plays a vital role in production capacity utilization. Performance of entrepreneurs is directly proportional to their business experience [5], Managerially trained entrepreneurs are more capable to handle the business properly in many respects viz. employment, investment and production [6]. Shortage of electric supply is a major difficulty for small industrialists which directly interrupt the production line and affect quality of the product [7].

2. RESEARCH METHODOLOGY

For the purpose of this research work, survey method has been used and data of 40 small business industrial units have been collected viz. Garments, Flour Mills, Rice Husking, and Biscuit Industry (10 units of each) from different cities of Sindh Province with the objectives to know the problems faced by entrepreneurs and to suggest ways and means to promote this sector.

3. RESULTS AND DISCUSSIONS

The related production of actual production to the normal rated capacity of the units is shown in Fig. I in order to assess the extent of actual utilization of their installed production capacity. Fig. 3 indicates 07 categories of entrepreneurs in respect of production capacity utilization. It ranges from 60% -90% with an average of 75%. Study further reveals that 01 (2.5%) of entrepreneurs utilize 60% production capacity, 04 (10%) utilize 65%, 12 (30%) utilize 70%, 07 (17.5%) utilize 75%, other 07 (17.5%) utilize 80% 06(15%) utilize 85% and remaining 03 (7.5%) entrepreneurs utilize 90% of production capacity. Fig. 1. also exhibits that none of the units under study are utilizing their full production capacity, as 60% of the entrepreneurs are utilizing average or below average production capacity and only 40% are utilizing above average. In other words, majority of the surveyed units are facing the problems of low production capacity utilization due to following causes.

2.1 Financial  Problems  and  Difficulties  in Obtaining Loans

It is observed that the entrepreneurs of this sector are facing the acute financial problems. Financial problems experienced by a large number of entrepreneurs are essentially in the area of working capital. Moreover, the entrepreneurs need relatively more amount of working capital in last few years due to inflation causing increase in prices of raw materials and increase in the establishment expenses. The entrepreneurs alleged that banks are still pursuing the traditional approach while financing the small units. The banks emphasis on amount and quality of security offered against the loans. On the other hand, while consulting the bank authorities, they posed their own problems in financing the small units like: inadequate information, improper maintenance of accounts, legal complications, unsatisfactory working of units, insufficient security, doubtful title of the assets offered as security, etc.

2.2   High Rate of Mark-Up

For the purpose of this research work, survey method has been used and data of 40 small business industrial units have been collected viz. Garments, Flour Mills, Rice Husking, and Biscuit Industry (10 units of each) from different cities of Sindh Province with the objectives to know the problems faced by entrepreneurs and to suggest ways and means to promote this sector.

3. RESULTS AND DISCUSSIONS

The related production of actual production to the normal rated capacity of the units is shown in Fig. I in order to assess the extent of actual utilization of their installed production capacity. Fig. 3 indicates 07 categories of entrepreneurs in respect of production capacity utilization. It ranges from 60% -90% with an average of 75%.

Study further reveals that 01 (2.5%) of entrepreneurs utilize 60% production capacity, 04 (10%) utilize 65%, 12 (30%) utilize 70%, 07 (17.5%) utilize 75%, other 07 (17.5%) utilize 80% 06(15%) utilize 85% and remaining 03 (7.5%) entrepreneurs utilize 90% of production capacity. Fig. 1. also exhibits that none of the units under study are utilizing their full production capacity, as 60% of the entrepreneurs are utilizing average or below average production capacity and only 40% are utilizing above average. In other words, majority of the surveyed units are facing the problems of low production capacity utilization due to following causes.

2.1  Financial  Problems  and  Difficulties  in Obtaining Loans

It is observed that the entrepreneurs of this sector are facing the acute financial problems. Financial problems experienced by a large number of entrepreneurs are essentially in the area of working capital. Moreover, the entrepreneurs need relatively more amount of working capital in last few years due to inflation causing increase in prices of raw materials and increase in the establishment expenses. The entrepreneurs alleged that banks are still pursuing the traditional approach while financing the small units. The banks emphasis on amount and quality of security offered against the loans. On the other hand, while consulting the bank authorities, they posed their own problems in financing the small units like: inadequate

The entrepreneurs are of the view that the banks/financial institutions charge the markup 18-20%, whereas private rate of markup is 24-30%. This high markup rate is proving to be very costly and burden some for many of the small entrepreneurs and is acting as a big damper particularly for the new entrepreneurs who are seeking place in the industrial

world.

3.3 Power Problem

Shortage of power supply is big problem for small entrepreneurs. For the last many years, the power situation in the country has gone from bad to worse and several units in this sector are facing hardship for their survival, In many cases, power is supplied only for few hours a day. The generator sets installed by certain units at an enormous cost to work as stand by are also lying idle because of high rate of oil. Besides it, the quality of power supply to industries come in for sharp criticism because of frequent tripping, voltage fluctuation and load shedding. This does not only interrupt the production but also makes the calculation of electric consumption unrealistic. The entrepreneurs have

been constantly pleading to rectify such anomalous conditions, but they do not get response. The entrepreneurs

expressed strong resentment against unprecedented mismanagement of WAPDA.

The raw material required by small industries are generally purchased from open market. The entrepreneurs of this sector can not face the stiff competition in the market with big industrialists, brokers, private stockists, auctioneers and like minded persons.

3.5  Working Atmosphere

The efficiency of the workers is directly or indirectly affected by the conditions under which they are required to do their work. Even the most conscious worker can not do his best work if he is uncomfortable.

Moreover approximately 50% of the units under study are generally well constructed and proper lighting, ventilation and sanitation have been provided there in, but remaining of the units are very old and it has been observed that the workers have to do work in cramped space, in an ill-lighted and ill ventilated buildings.

3.6 Education of Entrepreneurs

The education has always been considered as an important asset of an individual in building as occupational carrier in a society. In this research work out of 40 entrepreneurs 18 (45%) are less qualified (whose education is less than graduation), 22 (55%) are highly qualified (whose qualification is engineering, graduation or above). Furthermore many entrepreneurs are lacking business experience related to the nature of their units. Due to these factors entrepreneurs can not achieve their actual goals.

3.7  Managerial Training and Implementation of Industrial Techniques

As for as managerial training is concerned, Fig. 2 reflects that only 40% are well trained entrepreneurs, whereas 60% are not equipped with such type of knowledge. Further more it is observed that these units are not implementing modern scientific/industrial techniques like, production planning and control, time and motion study, ergonomics and operations research. Due to these lacking, entrepreneurs can not fulfill their objectives as per desire.

4. CONCLUSION

Based on the present research study, it is concluded that ignorance of implementing the scientific/industrial techniques, lack of managerial trainings, insufficient education and other problems like, power, finance, raw materials, and working atmosphere, these entrepreneurs are not capable to utilize their installed production capacity. In this regard given suggestions will be proved very helpful for the entrepreneurs.

5.   SUGGESTIONS

(1)       It is reported by the entrepreneurs that they are facing acute financial problem in the area of working capital and procedure regarding sanction of the loans. In order to solve this problem, it is suggested that:

(a)       Limit of borrowing loans be increased for
registered units so that this sector may compete in
open market.

(b)       Guarantor system may be introduced for providing loan facility in place of security. In this way this sector may get rid off these complications.

(2)          The entrepreneurs are of the opinion that they pay high markup to public as well as private sectors. It is, therefore, suggested that:

(a)        Government should take necessary measures to enhance this sector and direct the banks/financial institutions that markup rates be minimized to some extent, considering the difficulties facing by entrepreneurs and for the progress of this sector by which prosperity of the country is expected.

(3)        Inadequate and irregular supply of electricity is the big problem faced by small entrepreneurs. Frequent tripping and load shadings are also problems of this sector. In order to get rid off the power problems faced by the small industrial units, it is suggested that:

(a)        The WAPDA should ensure an uninterrupted power supply for at least 10-12 hours a day during normal working hours of the industries.

(b)         The government should direct WAPDA to levy electric charges on actual consumption of the power.

(c)        If possible, small entrepreneurs install diesel generators as stand by.

(4)        Due to heavy competition in the market, entrepreneurs of this sector can not face to purchase raw material from open market because of insufficient provision of funds.

(a)        It is suggested to ensure easy availability of raw material at considerable rates and in moderate quantities, government should make necessary arrangements and activate the related departments already established for this purpose, so that this sector can compete the market.

(5)       The entrepreneurs should take care of poor working conditions of the units and effective measures be taken to make proper arrangements of lighting, drinking water, ventilation and sanitation. They should appreciate the need of providing welfare measures and other amenities to the workers.

(6)        In case of education it is suggested that entrepreneurs should try to improve their education for attaining the socioeconomic goals, betterment of country and their own survival in the competitive world.

(7)           As for as managerial training and implementation of industrial techniques are concerned, it is suggested that:

(a)            Government Advisory Service Department should take necessary steps to motivate small entrepreneurs for upgrading their level of education to implement required industrial/scientific techniques.

(b)        Seminars be conducted and training programs be arranged to equip these entrepreneurs with required managerial knowledge of industry.

(c)         Certificates be awarded to successful entrepreneurs and subsidies be given for such units.

ACKNOWLEDGEMENTS

Authors are grateful to the entrepreneurs of the concerned Industrial units for their cooperation in providing required data to complete this research work. Authors are also thankful to the staff members of Department of Industrial Engineering & Management, Mehran University of Engineering & Technology, Jamshoro, for their helping.

REFERENCES

[1]           Roger, W.S. "Production/Operations Management", 4th Edition, Mac Millan Publishing Company, New York, 1990.

[2J                  Rashdi, P.R.S., "The Manufacturing Planning and Control of Make-To-Order Companies", Ph.D. Thesis, University of Nottingham, 1996.

[3]           Nebhwani, M.D., "Effects of Small Scale Industrial Units on Economic Development", M.E. Thesis, Mehran University of Engineering & Technology, Jamshoro, 1999.

[4]           Nebhwani, M.D., Abbasi, A.A., and Abbasi, S.A., "Impact of Education of Entrepreneurs on Various Business Parameters", Mehran University Research Journal of Engineering & Technology, Volume 19, No. 2, p.p. 103-108, Jamshoro, April, 2000.

[5]           Abbasi, S.A., Nebhwani, M.D., and Memon, A.G., "Effects of Business Experience of Entrepreneurs on Economic Factors", Paper Accepted for Publication in Mehran University Research Journal of Engineering & Technology, Jamshoro, 2000.

[6]           Saini, J.S., and Bhatia, B.S., "Impact of Entrepreneurship Development Programs", Pakistan Management Review, Vol. XXXVI, No. 1-4, 1995.

[71           Pasha, H.A., Ghaus, A,, and Malik, A., "The Differential Impact of Power Loadshedingon Industrial Units in Pakistan", Pakistan Journal of Applied           Economics, Vol. IX, No. 2,1990.