Organizational Study - Kar Mobiles Ltd
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Transcript of Organizational Study - Kar Mobiles Ltd
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EXECUTIVE SUMMARY
Kar Mobiles Ltd. is the second largest valve manufacturing company in India for internal
combustion engines. It is part of the RANE Group. Together with RANE engine valves Ltd,
Which is the No. 1 valve manufacturing company in India, belonging to the same group are
together having 70 % of the valve market share in India.
This project report depicts the insight into the organizational structure of Kar mobiles. It
briefs about the Industry Structure and the current trend of automobile ancillary industry. It
shows information from head to tails about the product profile, Area of Operations, Awards and
Milestones, the technology used. It also gives mines of information on the working and
organizational study of the Kar mobiles by taking into account the factor inputs, operations,
customer segments and competitors. The report also contains about the internal organizational
structure and the flow of information. The report goes further by providing a window into ways
in which our business can improve its operations. It also shows a picture of the threats and
opportunities lying ahead of the firm.
Under this project organization study is conducted in different areas of the organization
and departments .It includes the description of various functional areas of the the organization
and the different strategies used by the firm to enhance the efficiency of the overall firm .
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INTRODUCTION
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INTRODUCTION
KAR MOBILES LIMITED (KML) is part of the RANE Group, a world class automotive
components manufacturer recognized as a preferred supplier to major OEMs in India and
Overseas. With over 3 decades in the manufacture and supply of Internal Combustion Engine
Valves, KAR Mobiles is TS16949 certified, practicing TQM as a way of life.
KAR mobiles limited manufactures Valves for internal combustion engines. The company
manufactures valves of all sizes and ranges used in various vehicles like motor cycles, cars,
trucks, railways engines, defences tanks, generators sets and marine engines. Now the KML is
totally licensed with 8 million Valves per annum, 5.5 million at Peenya unit & 2.5 million at
Tumakur unit.
The KAR mobiles limited basically it is a manufacturing industry. The KML manufactures
Valves for all internal combustion engines. The co. is one of the diesel oriented unit which
supplies valves for all engines both petrol & diesel & is fully equipped to support its developing
needs.
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NEED OF THE STUDY
For fulfillment of degree requirement.
To gain practical working experience
To understand about the corporate culture
To know about the organization
To know about the various tasks carried by the various departments of the firm.
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INDUSTRY PROFILE
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INDUSTRY PROFILE
INDUSTRY OVERVIEW:
The Indian auto component industry is one of India's sunrise industries with tremendous
growth prospects. From a low-key supplier providing components to the domestic market, the
industry has emerged as one of the key auto components centers in Asia and is today seen as a
significant player in the global automotive supply chain. India is now a supplier of a range of
high-value and critical automobile components to global auto makers such as General Motors,
Toyota, Ford and Volkswagen, amongst others. India has a good network of manufacturers of
Auto components and spares spread all over the country. These component manufacturers also
manufacture all kinds of parts for all Indian vehicles apart from Japanese, German and
continental vehicles. They have the capacity to design as per clients’ specifications/drawing to
provide them quality service.
As per an Automotive Component Manufacturers Association of India (ACMA) report, the
turnover of the auto component industry was estimated at over US$ 19.1 billion in 2008-09. The
industry's turnover is likely to touch US$ 40 billion by 2015-16. The potential compounded
annual growth rate (CAGR) of the auto component industry is estimated to be 11 per cent in the
period 2008-15. Exports from the auto component industry is estimated to be worth US$ 3.8
billion in 2008-09, recording a rise of 8 per cent over the previous fiscal, according to an
ACMA report.
North America accounted for 22 per cent of India's auto components exports in 2007-08,
followed by Asia at 15 per cent. The industry has witnessed a shift in the composition of exports
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over the years, with the original equipment manufacturer (OEM/TIER 1) segment accounting
for 80 per cent of exports in 2008. The share of aftermarket segment in auto component exports
stood at 20 per cent in the same year. Investments in the auto component industry are estimated
at US$ 7.7 billion in 2008-09, according to ACMA.
Some leading manufacturers of auto components in India include Motor Industries
Company of India, Bharat Forge, Sundaram Fasteners, Wheels India, Amtek Auto, Motherson
Sumi, Rico Auto and Subros. The India’s Top 500 Companies, published by Dun & Bradstreet in
2009, listed 22 auto component manufacturers as top companies in India with a total turnover of
US$ 3 bn. These companies are in the process of making a mark on the global arena, and some
have already acquired assets abroad.
PRODUCT CLASSIFICATION:
The auto ancillary industry can be further divided into six main segments:
Table 1.1 showing segments of auto ancillary industry
Engine Parts
Piston, piston rings, engine valves, fuel pumps, carburetors and bimetal bearings.
Electrical Parts Starter motors, generators and spark plug.
Transmission and steering Gears, steering gears and system, wheel, clutch plate and disc.
Suspension and braking Leaf springs, shock absorbers, brake assembly and facings.
Equipment Head light and dashboard instruments
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Others Sheet metal parts, pressure disc castings.
Chart 1.1 showing Auto Components Product segments
The Indian auto component industry is poised for robust growth till 2010. There is a
perceptive exuberance in the industry and growth estimates indicate a booming industry. The
production of auto components could grow to US$22 billion by 2010. Expected growth in
production and exports of auto components is shown in the chart below.
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Chart 1.2 showing exports of Auto Components
NATIONAL SCENARIO:
According to the Investment Commission of India, India is among the most competitive
manufacturers of auto components in the world. India is also becoming a global hub for research
and development (R&D). Companies like Daimler Chrysler, Bosch, Suzuki and Johnson
Controls have set up development centers in India. Many international auto-component majors
including Delphi, Visteon, Bosch and Meritor have set up operations in India. Auto
manufacturers including GM, Ford, Toyota, etc. as well as auto component manufacturers have
set up International Purchasing Offices (IPOs) in India to source for their global operations.
Having established itself as a leading trade fair in Germany, the USA and China, Automotive
Testing Expo India 2010, held at HITEX Exhibition Centre in Hyderabad, was hailed a success
by exhibitors and visitors alike.
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Foreign Investments
German automotive components company, Wallstabe & Schneider, has established its Indian
presence by signing a joint venture (JV) agreement with Thane-based Mecnam Products and
Mumbai-based Deshmukh Rubber Works Pvt Ltd.
The world's largest automotive component manufacturer, Bosch, plans to invest US$ 433.5
million in India over the next three years. "India will be an important market for the company in
the immediate future," said Bernd Bohr, Chairman of the Stuttgart-based Bosch Automotive
Group.
Japanese tyre-maker Bridgestone Corporation plans to invest about US$ 36.7 million in its
Indore manufacturing unit to produce new truck and bus radial products.
Ford India inaugurated its facility at its Chennai plant meant to be turned into ‘Ford's global low
displacement engines' hub. The facility will produce both petrol and diesel engines. The engines
that will be produced initially will go into Ford's small car—the Figo. As Ford India's investment
program of US$ 500 million is about 90 per cent complete, the Chennai plant is now equipped to
produce 200,000 cars and 250,000 engines.
Domestic Investments
The market is so large and diverse that a large number of players can be absorbed to
accommodate buyer needs. The sector not only has global players looking to invest and expand
but leading domestic component companies are also pumping in huge sums into expanding
operations.
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Tyre manufacturer, Apollo Tyres Ltd, is set to make Chennai its manufacturing and research and
development (R&D) hub and is establishing a US$ 433.6 million manufacturing facility, which
is likely to see an additional investment of US$ 130.09 million.
The Tamil Nadu government has cleared the proposal of tyre manufacturer, JK Tyre & Industries
Ltd, for setting up a new production facility in the state, which would attract around US$ 346
million in investment.
Policy Initiatives by government
The government has taken many initiatives to promote foreign direct investment (FDI) in
the industry.
Automatic approval for foreign equity investment up to 100 per cent of manufacture of
automobiles and components is permitted.
The automobile industry is delicensed.
Import of components is freely allowed.
The government has envisaged the Automotive Mission Plan 2016 to promote growth in
the sector. It targets to:
o Increase turnover to US$ 145 billion by 2016
o Increase export revenue to US$ 35 billion by 2016
o Provide employment to additional 25 million people by 2016
o The automotive sector is expected to contribute 10 per cent of the country's
GDP by 2016
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PROSPECTS:
Looking forward, the industry displays tremendous potential in generating employment and
boosting entrepreneurship in the country. The spate of new investment plans announced by
global and domestic automobile manufacturers promises the emergence of India as a global hub
for auto components.
The industry is transforming and the boost in demand will see the emergence of several new
players in the industry. Among the smaller players in the unorganized segment, this implies
moving away from being standalone companies, to entering into either contract manufacturing
or being ancillary units. The newly defined rules are specialization, development and delivery
that hold the key to success in the auto component industry.
Indian Company Foreign Acquisitions by Indian
Companies
Country
Bharat Forge
CDP Aluminiumtechnik Germany
Federal Forge USA
Imatra Kilsta AB Sweden
Scottish Stampings Ltd Scotland
WOCO Group Germany
Motherson Sumi G&S Kunststofftechnik GmBH Germany
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GWK UK
Amtek Auto
New Smith Jones Inc USA
Zelter Germany
Bleisthal Produktions GmBH Germany
Sundaram Fasteners
Cramlington Forge UK
CDP GmBH Germany
Shakespeare Forgings UK
EL Forge RBI Autoparts SND BHD Malaysia
TVS Autolec Fuji Autotech France
Sona Koyo
Source: Auto Component Manufacturers Association.
According to ACMA (Auto Component Manufacturers Association)
Auto-Component Sector needs US$ 1.5 billion of new investments every year for next 8 years.
Overseas auto-component manufacturers, especially small and medium enterprises (SMEs)
should invest more in capacity enhancements and Greenfield manufacturing in India – to meet
growing domestic demand for auto-components.
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Industry & Market Analysis
POLITICAL FACTORS
Liberalization & Globalization.
Change in policies due to change in ruling party.
Industrial Development.
Policy on international trade leading to international competition.
Policy on labor reforms.
Disappearing trade barriers.
ECONOMIC FACTORS
Level of inflation & interest rates.
Level of taxation, both direct & indirect.
Fluctuating exchange rates – Rupee becoming stronger.
Increasing disposable domestic incomes.
Booming automotive industry.
Steel industry becoming stronger across the globe.
Uncertainty on availability of export incentives.
Railways increasing their capacity & efficiency.
SOCIAL FACTORS
Increasing population.
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Changes in life styles.
Changes in Employee values.
Pollution and environmental issues.
TECHNICAL FACTORS
Industry-wide innovation.
Products with longer life cycles.
Transport infrastructure.
Improved communications.
Information technology.
Increased participation of end product manufacturers in retail trade and services.
Uncertainty on golden quadrilateral.
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ORGANIZATION PROFILE
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COMPANY PROFILE
INTRODUCTION
KAR MOBILES LIMITED (KML) is part of the RANE Group, a world class automotive
components manufacturer recognized as a preferred supplier to major OEMs in India and
Overseas. With over 3 decades in the manufacture and supply of Internal Combustion Engine
Valves, KAR Mobiles is TS16949 certified, practicing TQM as a way of life.
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Table showing Rane group of companies and their products manufactured
Sl. No: Company Products
1 Kar Mobiles Limited (KML) Medium & Large Valves for diesel engines.
Specialize in Locomotive, Power generation,
Off-road vehicles & defense applications.
2 Rane Brake Linings Limited (RBL) Brake linings, Disc pads, Composite brake
blocks, Clutch facings
3 Rane Diecast Limited (RDL) High Pressure Die Casting Products
4 Rane Engine Valve Limited (REVL) Valves, Valve Guides, Tappets
5 Rane (Madras) Limited (RML) Manual Steering & Suspension Systems
6 Rane NSK Steering Systems Limited
(RNSSL)
Energy Absorbing Steering Columns
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7 Rane TRW Steering Systems Limited
(RTSSL)
Power Steering Systems & Seat Belt Systems
KAR mobiles limited manufactures Valves for internal combustion engines. The
company manufactures valves of all sizes and ranges used in various vehicles like motor cycles,
cars, trucks, railways engines, defenses tanks, generators sets and marine engines.
Kar mobiles stands for:
K- Knowledge
A- Application
R- Reliability
M- Motivation
O- Opportunity
B- Brilliance
I- Innovation
L- Leadership
E- Excellence
S- Services
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KAR MOBILES Ltd., Bangalore:
The Bangalore-based Kar Mobiles (KML) set up its factory to manufacture valves for
internal combustion engines in 1973-74. Commercial production commenced in 1974. In 1978-
79, it implemented a project to expand its capacity from 1.5 million to 3 million per annum
which was again increased to 5 million per annum in 1980-81.
Having successfully established itself in the domestic market as a quality manufacturer of
valves for internal combustion engines, it entered the export market in 1977. Its first customer
was Lister Petter, UK, with whom it started business in 1977. Currently, it enjoys nearly 90 per
cent of Lister Petter's business. It started expanding its customer network in the UK and added
customers like Kelvin Diesel, Villiers, Gardner and Sons, etc, and started exporting valves to
France and Germany.
The company established a 100% EOU in 1982-83 which commenced commercial
production in the last quarter of 1984. The company widened its product range to include valves
for heavy-duty stationary engines, locomotives and valves for the Defense sector. It also
developed special types of masked valves for the export market.
KAR MOBILES Ltd., Tumkur:
The company KAR Mobiles Ltd., Tumkur was started in the year 1984, as a 100% EOU
to cater exclusively for international market under the leadership of sri V.P.Agharam, KAR
MOBILES LTD., was born out of an electric supply undertaking in the old Maharaja’s state of
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Cochin under the name of “Cochin state and Light corporation Ltd., Which was started in the
year 1936. This was engaged in the distribution of electricity.
The capacity of the plant is 6.5 million to 8.5 million units per annum. The company is
equipped with well – sophisticated equipment’s and is therefore capable of producing a range of
values to defense forces, a truly remarkable sign of its high performance caliber.
It has several departments like production, quality inspection, storage,
maintenance human resource and marketing.
During 1996-97, to cater to the needs of the global automotive companies, company has
signed a technology license agreement with TRW Inc. USA. Company has also appointed TRW
as sole selling agents for all countries except India, Pakistan, Bangladesh and Sri Lanka in
respect of sales to original equipment manufacturers. In 1996-97, foreign exchange earned by the
company is amounting to Rs. 8.13 crores.
The company's passenger car sales leapfrogged by a spectacular 48% and the commercial
vehicle grew by a robust 40% in the year 1999-2000.
Over a quarter century of service in both domestic and overseas markets, has earned for
the company an impressive clientele and substantial market share.
Export is the main thrust area and the company has gained:
Ship-to-use and preferred supplier status with OEMs
Confidence of transcontinental customers.
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Achievements and awards
Awards are the part of the evaluation & growth of every co. they look at these recognition as
a source levels of performance & excellence. They are proud of every award they have received
& they greatly value the role they have played in transforming KAR mobiles into a high
performance organization.
Year Awards & certification
1998 Excellence for export award
1995 ISO 9000 certification
1995 ISO 9002 Quality certification from BVQ
2001 QS 9000 certification
2003 ISO 14000 certification
2004 ISO 15000 certification
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Milestones of kml
1973- Foundation stone laid
1975- Commercial production started & made forays into OEM segment
1976- Developed large valves for diesel 1000 application
1977- First export made to R. A listed and company UK
1980- Capacity enhanced to 5 million no’s first export made to R. A. lister & co. UK
1983- Set plant 2nd, a 100%, OIJ, with a capacity of 1.5 million valves developed special
purpose machines indigenously.
1995- Received ISO 9000 certification
1991- Promoted ETM technology for developing purpose machine
1996- Business process re-engineering implemented.
1997- Entered into technical collaboration with TRW include USA
1998- HRD established
1999- Approved by electro motive division (EMD) of GM corporation USA as the first
vendor from India
2000- TQM & TPM initiated
2001- QS 9000 certification
2002- Plant 2nd de-bonded as EOU
2003- Cellular manufacturing
2003- ISO 14000 certification
2004- Lean manufacturing
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2005- TQM Deming award & JIPM award are on the lards
2005- Lean manufacturing
Manufacturing capacity
Location Geographical
total area
(Sq.mts)
Geographically
built area
(Sq.mts)
Production valve
(Million)
Export
Bangalore 24300 14000 6 5%
Tumkur 40450 2200 2.5 95%
BACKGROUND AND INCEPTION OF THE COMPANY
History
KAR mobiles limited was born out an electronic supply under taking in the old
Maharaja’s state of Cochin under the name of Cochin state power & light corporation limited.
The company was started way back in the year 1936 & was engaged in distribution of electricity.
In 1971 this business was nationalised. The company received compensation & on that time the
shareholders decided to invest in new business venture.
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Sri. S. Venkataraman, MD of Cochin State Power & Light Corporation Ltd. & Sri.
Narayanan, MD of Engine Valves Ltd. Jointly decided to start a business in manufacturing of
Valves for internal combustion engine in Karnataka. And they are selected the present location in
Peenya (Bangalore). The company was initially named as KAR VALVES LIMITED
incorporated in 1972 under Indian Companies Act, with licensed capacity of 1.5 million Valves
per annum. Later the name was changed into KAR MOBILES LIMITED.
Overview of the KML
Sri. V.P. Aghoram was appointed as MD of the company in 1972.
Mr. L. L. Narayanan laid the foundation stone on August 30th 1973.
KAR mobiles limited commenced its commercial production in the year 1974.
The first invoice was made on 12th March 1975 to M/s. Conwest Private Ltd. Delhi.
In 1976 the emergency & slump in the market compelled the Co. to develop other markets
and Large Valves for Diesel low application & exports came into focus.
In 1981 the Co. has become the single source supplies of Valves to the UK customers.
At this time Sri V. P. Aghoram, MD of the KML identified overseas market as the
biggest opportunity to grow. To achieve this 100% export oriented unit was setup at
Tumakur in Karnataka commenced production from August 1984.
Now the KML is totally licensed with 8 million Valves per annum, 5.5 million at Peenya
unit & 2.5 million at Tumakur unit.
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NATURE OF BUSINESS CARRIED
The Kar Mobiles Limited manufactures valves for all internal combustion engines. The
company is one of the diesel oriented unit which supplies valves for all engines both petrol and
diesel and is fully equipped to support the developing market needs. A valve is a product rarely
noticed by the average person, yet it plays an important role in the quality of our life.
Valves are made from chrome-silicon alloy steel and exhaust from chrome-nickel silicon
alloy steel to operate under high temperature and high stress conditions. The valves commonly
used in piping systems are gate valves, usually operated closed or wide open and seldom used for
throttling; globe valves, frequently fitted with a renewable disk and adaptable throttling
operations; check valves, for automatically limiting flow in a piping system.
Valves are also supplied with liquid nitrating process or herd Chrome plating which
increases the surface hardening the stem. This improves resistance with consequent sliding ease.
CERTIFICATE:
A testimony to the company’s commitment to quality systems through:
QS 9000 quality certification form BVQI.
Initiatives like TQM, TPM and Employee involvement.
Well-equipped standards room with testing facilities.
Synergies with reputed local testing institutes enable and ensure high quality products
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Environmental policy
kar mobiles ltd is committed to :
Maintain and improve the environment continuously.
Conserve natural resources.
Build awareness amongst all employees on environmental issues through continuous
training.
Comply with all relevant environmental statutory and regulatory requirements.
Operate under an environmental management system, as specified in the ISO 14001
Communicate this policy to all employees and make it available to the public on request.
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STAKEHOLDERS
Ownership Pattern:
SI. No. Category No. of Shares % of Share holding
1 Promoters 923,867 41.24
2 Govt. of Kerala 37,500 1.67
3 Banks 3978 0.18
4 Private corporate bodies 224,227 10.01
5 NRIs & OCBs 2,280 0.11
6 Individual & Others 1,048,148 46.79
Total 2,240,000 100.00
Bankers:
STATE BANK OF INDIA
Composition of Board of Directors:
L Ganesh – Chairman
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V Ramachandran
INDEPENDENT & NON-EXECUTIVE DIRECTORS:
Mr.A.Hydari
Mr.K.P.Balasubramaniyam
Mr.L.Lakshmanan
Mr.C.N.Srivatsan
Promoter Group:
PRODUCT PROFILE
Introduction about valves
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Name Status
Mr.L.Ganesh Chairman, Non- executive Director
Mr.L.Lakshman Non- executive Director
Mr.V.Ramachandran Non- executive Director
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A valve is an ancillary unit. It is used in internal combustion engine. An engine holds a pair of
valves, one inlet valve and one exhaust. Every four stroke engine whether petrol or diesel
requires internal combustion called IC valves. In any engine two valves have to be there, one for
admitting combustible charge into the cylinder known as the inlet valve and the other to dispel
the burnt gases to the atmosphere through the silencer known as exhaust valve. Some of the most
popular valve steels are EN-52, FN-59, EN-51 etc are martensitic valve steels and 21-4N, 21-
12N etc are austenitic valve steels.
The principle product
manufactured in both the plants
is valves for internal
combustion engines for
automotive & non automotive
applications of OEM & after
market.
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The ranges of products are:
AUTOMOTIVE:
1. Two wheelers,
2. Three wheelers,
3. Cars & light vehicles
4. Heavy commercial vehicles.
NON AUTOMOTIVE:
1. Locomotives
2. Marine applications
3. Power generations
4. Aero engines
5. Battle tanks.
6. off road vehicles.
Range:
More than 600 types of valves developed over a wide range of applications. The value is used in
internal combustion engine. It opens and closes the valve ports. If the ports always open, the fuel
exploded in the combustion chamber would leave through the ports. The explosion has to be kept
in the combustion chamber to push the piston down. The valves are set up to open and close at
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exactly the right moment. One lets the fuel mixture in and closes. After the fuel explodes and
pushes the piston down the other valve lets the exhaust out.
The valve consists of the following parts:
The wide portion of the valve is called head.
The long cylindrical portion is called valve stem.
The portion of valve that connects the valve head and stem is called valve neck.
The tapered portion on engine cylinder block on which valve is known as valve face.
BIG VALVES RANGE:
Alco.
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Bergens.
EMD
Mirrless black stone.
Pielstick.
Wartsila.
Waukesha.
Ruston.
Paxman.
White superior.
Inlet and Exhaust valves are precision engine components for sealing Inlet exhaust ports,
which are used for controlling the gas exchange Process in internal combustion engines.
They are meant to seal off the working space of the cylinder from outside the thermally
lower-stressed inlet valves are cooled by the fresh gases which flow around them. Exhaust
valves are subjected to high thermal stresses and chemical corrosion during the exhaust
cycle.
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Picture Showing Specifications Of Valve
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Definition of medium & large valve
Head Dia Stem Dia Length
Small 20 5 75
Small Medium 28 7 100
Medium 32 8 110
Medium Large 40 10 140
Large 56 14 180
Extra Large 78 16 300
Extra Extra Large 120 20 400
Manufacturing in kml:
As stated earlier, KML manufactures valves of all sizes for IC engine for both automated
and non-automated applications. The method adopted by KML is according to the customer
specifications. All the valves are checked according to the SAE standards.
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The valves are being used in engines having 5 HP to 3000HP. For the production of these
valves, different sophisticated and modern equipments are being used in KML. Some of them are
MC grinders, lathe cutter, valve welder, heat treatment machine, CNC machine etc
Manufacturing capacity:
Head Dia Min. 18 mm Max. 105 mm
Stem Dia Min. 5 mm Max. 22 mm
Overall Length Min. 50 mm Max. 450 mm
Area of operation:
The KML expands the business in around the world. It has the global market. Some part
of production distributed to domestic purpose. Therefore it adopts the global business
environment.
Equipment includes:
Profile projectors
Tool maker's Microscopes
Roundness testers
Surface roughness testers
Dial calibration testers
Cylindricity tester
Magnetic particle inspection
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Ultrasonic testers
Hardness testers
Applications:
Engine valves for applications ranging from 5 H.P. to 4000 .H.P. engines in segments such as:
Marine Applications
Locomotives
Diesel Engines
Battle Tanks
Automobile Industry: Passenger cars, Light commercial vehicle, Heavy commercial
vehicles & Two – wheelers.
Tractors
Agricultural / Industrial / Stationary
High performance cars
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ORGANIZATIONAL STRUCTURE
Introduction to organization
Organizations are as old as the human race itself. They are group who work towards some
purpose, organizations are not a physical structure rather they are people who work together to
achieve a set of goals. An organizational structure is a mostly hierarchical concept of
subordination of entities that collaborate and contribute to serve one common aim.
Importance of organization
Organization is the foundation of arrangement; organization allows people jointly to increase
specialization and division of labor, use large scale technology. Organizations are a variant of clustered
entities. The structure of an organization is usually set up in many a style, dependent on their objectives
and ambience. The structure of an organization will determine the modes in which it shall operate and
will perform.
Manage the external environment:
Economize on transaction cost, extra power and control. This increases the value that an
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organization can create. If the organization is not properly designed and reveals a number of
problems then the divisions become ineffective. The result will be slow in work, lack of co-
ordination of activities, conflicts among the member
Structure:
The company follows line and staff organization. The company is managed
by the executive vice chairman who is nominated by the Board of Directors, who takes decisions
regarding policy making and decisions in other important fields. The company is headed by
Chairman under him comes the executive vice chairman. The vice president-operations reports to
the President.
The main departments in Kar Mobiles are Marketing department, finance
department, materials department, production department, information system and personnel
department. Each department is headed by the head of the department. The HODs of marketing,
finance and information system directly report to the President whereas the HODs of other
departments report to the DGM operations who in turn report to the Vice president-operations.
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Senior Manager Accounts
HOD-Material
OEM-Marketing
HOD-Marketing HOD-
Marketing
HOD-Marketing
HOD-
Marketing
DGM Operations
Manager-Costing
Chairman
Executive vice-chairman
President
Senior Manager Engineering
Management representative
Replacement Marketing
Exports
Vice president HOD-Finance
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Organization Chart Corporate
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COMPETITORS
1. Rane Engine Valves Ltd.
2. Shriram Piston & Rings Ltd.
3. Auto Field Engineers
4. Benera Udyog Ltd.
5. Gracko Valves Ltd.
6. Duro Valves Ltd.
7. Vikram Valves Ltd.
Major manufactures in engine valve companies
1. RANE ENGINE VALVE LTD. CHENNAI
Established in 1959
Two plants in Chennai & two plants in Hyderabad
Collaboration with TRW inc. USA
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QS 9000 & ISO !4,000 accredited
Leading & preferred suppliers of all OEM’s in India
Exports constitution over 20% of sales. Products exported to Australia, Germany, Iran,
Italy, Middle East, UK & USA. REVL is a registered export house
PRODUCTS: Engine Valve, Valve guide, tappets, Crank Shaft for compressors, Cutch
booster.
2. KAR MOBILES LIMITED BANGALORE
Second largest manufacturing of Valves for internal combustion engines in India.
Export constitutes 50% of turnover.
First Indian company to be approved as vendors by GM, EMD, USA.
A preferred supplier to OEM’s in India & abroad.
3. SRI RAM ENGINEERS LIMITED HYDERABAD
Manufacturing, developing & supplying of precision engine parts.
Fifteen years experience.
Exports to UK, Germany, Sweden, Greece, Spain, Portugal, Mexico, Egypt, Turkey,
Cambodia, Sudan, Singapore, UAE.
Adhere to the infrastructure norms of quality, competent infrastructure assures &
expedite delivery of products.
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OTHER SMALL MANUFACTURES
There are many small manufactures with varying turnover from one crore to Ten crores.
Most of the companies have their direct presence felt in the local auto market; some of the major
played in these sectors are as follow
Usha Auto Component Parts
Keco Auto
Sunco Engine Parts
Cummins Valves.
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Competitor Analysis
Industry / Competitor Price war in the industry Enhanced quality levels Diminishing differentiation Capacities augmented in large increments High fixed costs
Suppliers Few suppliers and high bargaining power Scope for Vendor Development (RM) low
Entry Barriers
Limited domestic potential Established players Collaboration with world leader Increasing quality requirements
Customers Strong bargaining power of OEMs Global sourcing by overseas buyers Demanding Aftermarket customers
Substitute Products None for valves Increased life cycle
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AREA OF OPERATION
The co. has its network all over the global & the manufacturing process entirely takes
place in India. They have their agents who market their products behalf of the co. & even they
sell their product directly to the customers according to their needs & satisfaction.
CUSTOMERS
Domestic
1. Ashok Leyland Ltd.
2. Bajaj Tempo Ltd.
3. Bharath Earth Movers Ltd.
4. Cummins India Ltd.
5. Diesel Locomotive Ltd.
6. Escorts Tractors Ltd.
7. L & T John Deers.
8. Mahindra & Mahindra Ltd.
9. Maruthi Udyog Ltd.
10. Same Greavas Ltd.
11. Tata Engg. & Locomotive Co. Ltd.
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Overseas
1. Federal Mogal USA
2. GM- EMD, USA
3. HATZ, Germany
4. Lister Petter Ltd. UK
5. Lombardini SRL Italy
6. Mirrless Blackstone UK
7. Steyr Chaina
8. VEGM Germany
GROWTH PROSPECTS
Looking forward, the industry displays tremendous potential in generating employment
and boosting entrepreneurship in country. The spate of new investment plans announced by
global and domestic automobile manufacturing promises the emergency of India as a global hub
for auto components.
The industry is transforming and the boost in demand will see the emergency of several
new payers in industry. The vast market for auto components, and the diverse products and
technology involved ensure a place and role for many. At the same time, the entry of several
global automobile manufacturing will bring in more regulation into the industry and see a
pruning of the spurious market. Among the small players in the unorganized segment, this
implies moving away from being standalone companies to entering in to either contact
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manufacturing or being ancillary units. The newly defined rules are specialized, development
and delivery that hold the key of the success in the auto component industry.
At KAR MOBILES LIMITED, they have always taken a long term perspective when
preparing their business strategies. They expected robust all-round growth in the global economy
in the next 10 years. They also believe that the global economy has more inclusive. Countries
like India and Chaina are now poised to play a larger role in determining the course of the global
economy. Their manufacturing presence in India, the US, Europe and Chaina has positioned
them to capture global opportunities, and helping downturns, should they occur. In view of this,
they are very optimistic about the future.
The company manufactures valves of all sizes and ranges used in various vehicles like
motorcycles, cars, trucks, railway engine, defense tanks, generator sets and marine engines.
KAR Mobiles enhanced preferred supplier to OEMs in India and aboard. KML
specializes in supply of valves to manufactures of large engines like
M.A.N
Mirrless Blackstone
Pielstick
Ruston
Wartsila Diesel
In India approximately 26 million engine valves are sold every year and the major
contributors are REVL, KML and SRIRAM. KAR Mobiles company is one of the domestic
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supplier of values for all engines both petrol and diesel driven and is fully equipped to support its
developing market needs.
KML operates on PRODUCT and ROUTE CARD concept of production. KML is public
limited company. The product KML is presently being exported to U.K,, USA, Germany and
Australia.
OBJECTIVES OF KAR MOBILES:
The company in its continuous quest for excellence seeks new frontiers, delivering best -
of-breed products that meet global quality standard and adopts innovative techniques to further
improve customer service.
To be punctual to work to reduce absenteeism, not wasting time.
To be punctual at work.
Sorting tools and documents at right place in a clean way.
Helping others in work and other aspects.
Work-Effectively
Think-constructively
Act-Friendly
Risk-cautiously
Dress-nicely
Talk-sensibly
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Invest-Prudently
Judge-Wisely
Maintaining cleanliness in work
Increasing productivity.
Vision
The vision of Kar Mobiles Limited is to achieve 2000 million sales by 2013 by
strengthening global presence in large engine valve market.
To increase our global presence in medium and large engine valve market
Mission
The mission of Kar Mobiles Limited is:
Provide superior products and services to customers and maintain market leadership
Evolve as an institution that serves the best interest of all stakeholders
Pursue excellence through TQM
Ensure the highest standards of ethics and integrity in all actions.
Area of operation
The company has its network all over the globe and the manufacture process entirely takes place
in India. They have their agents who market their products on behalf of the company and even
they sell their product directly to the customers according to their needs.
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Dealership network:
Kar Mobiles Limited has 400 countrywide direct dealers and 17 countrywide warehouses
Technical collaboration:
In the year 1997, Kar Mobiles Limited entered into a technical collaboration with TRW Inc.,
USA to upgrade product and process technology. Under the technical agreement TRW had
licensed for 10 years engine valve manufacturing technology to Kar Mobiles Limited. In
addition, TRW has become the manufacturing and distribution agent for Kar Mobiles Limited for
engine valves in market outside India. The Company has become the first vendor from India to
be approved by Electric Motive Division (EMD) of General Motors Corporation, USA.
Listing on Stock Exchanges:
1. Bangalore Stock Exchange Ltd- Stock Code: KARMOBILES
2. Madras Stock Exchange Ltd-Stock Code: KMB
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FUNCTIONAL DEPARTMENTS
Department is a structural process in which individual interacts to objectives. It is the foundation
of arrangement. The managers co-ordinates and control the activities through organization. If the
organization is not properly designed and reveals a number of problems then the divisions will
become in effective. The result will be slow and divisions lack of co-ordination of activities
conflicts among members therefore leadership, motivation and co-ordination should be achieved.
LIST OF DEPARTMENTS IN KML
FINANCE
MARKETING
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HUMAN RESOURCE
PRODUCTION AND OPERATIONS
QUALITY ASSURANCE
INFORMATION TECHNOLOGY
PLANNING
MATERIALS
MAINTENANCE
ENGINEERING
MARKETING DEPARTMENT
Kar Mobiles Limited has three types of customers and there are separate marketing heads for
these customers.
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President
General Manager
Sr.manager OEM Sr.manager Replacement Sr.manager Exports
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The Head of the department of marketing Mr.Atul Arora reports directly to the President.
Below him there are three managers who are in-charge of OEM, Replacement and Exports.
There are executives below these managers of respective department. Original Equipment
Manufacturers (OEM) marketing deals with customers like TATA, Maruti, and Mahindra etc.
Replacement marketing deals with the dealers of Kar Mobiles Limited. Exports fully take care of
the exports and foreign customers of the company.
MAJOR CUSTOMERS OF KML:
KAR MOBILES is also the first vendor from India approved by GM-EMD, USA.
CLIENTS / CUSTOMER
Over a quarter century of service in both domestic and overseas market has earned for the
company an impressive clientele and substantial market share.
DOMESTIC CUSTOMER
Ashok Leyland Limited
Bajaj Tempo Limited
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Office admin executives
Field staff
ExecutivesExecutives
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Bharat Earth Movers Limited
Cummins India Limited
Diesel Locomotives works
Escorts Limited
L&T John Deere
Mahindra &Mahindra Limited
Maruti Udyog Limited
Same Greaves Limited
Tata Engineering and Locomotive Company Limited
VST Tillers and Tractors Limited
OVERSEES CUSTOMER
General Motors EMD, USA
HATZ, Germany
Lister Petter Limited, UK
Lombardi SRL, Italy
Mirrless Blackstone, UK
Steyr, China
VEGE, Germany
Wiscon, USA
Federal Mogul, USA
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Industry Structure and Developments: Growth in %
Segments 2009-10 2008-09
Passenger Cars 28 5
Utility Vehicles 24 -11
Small Commercial Vehicles (one Ton &
below)
8 12
Light Commercial Vehicles 77 -24
Medium and Heavy Commercial Vehicles 30 -35
Three Wheelers 25 -1
Two Wheelers 25 4
Farm Tractors 27 -7
FINANCE DEPARTMENT
The finance department is headed by General Manager-Finance who reports directly to the
President. There are two departments under finance department. These departments are headed
by Manager-Costing and Senior manager-Accounts. Under these there are executives for the
concerned works. The finance department of Kar Mobiles is headed by Mr.H.K.Vadiraj.
54President
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ROLES AND PURPOSE OF THE DEPARTMENT
ROLES:
Reduce Finance Cost
Budgeting and Tracking
Provide information on Financials
Minimize Financial Risks
Cost Management
MIS Support
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General Manager
Senior Manager Accounts
Deputy executives
Sr. executive
Asst manager
Executives
[Type text]
Internal control systems
Meet Corporate Governance
Processing of Customer Outstanding
Accounting and Payments of all Creditors
Accounting and Payment of interest on Trade Deposits
Analysis of Creditors Outstanding
Reconcile accounts payable
Ensure Timely Employee Payments
Ensure Timely Remittance of Statutory & Non Statutory Payments
Ensure Proper Payroll Accounting
Ensure Timely Employee Annual Payments
Compliance of Employee Income Tax
Compliance of Statutory Returns & TDS
Efficient monitoring and accounting of bank payments
Efficient controlling and accounting of cash receipts and payments
Maintaining General Ledger Balances through continuous reconciliation of accounts.
Consolidating SBP/AOP
Assist in Finalization of Annual Accounts
Assist in preparation of MIS
Export and Import bill accounting and payment
Ensure Timely Remittance of Statutory & Non Statutory Payments
Prepare MIS on utilization of funds
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Compliance of Sales Tax
Monitor & account branch expenses
Reconcile bank current accounts
Assist in computation /updating product costing
Prepare monthly FG & WIP stock valuation
Accounting & payment of employee Travel Claims
Co-ordinate WIP & FG physical inventory
prepare MIS
Accounts Book –Keeping
Support in Comply with Accounting Standards
Meet Statutory requirements
PURPOSE:
To Control finance optimally & provide management information support
To Provide Financial accounting information
To Provide Financial accounting information and Cost Management
To Provide MIS And perform Secretarial functions
To Facilitate effective receivable management
To ensure accurate liability creation and payment to supplies and services
To make correct, timely employee payments and employee accounts
To maintain and properly account cash transactions
To Maintain general accounts
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To Facilitate licensing & bank related jobs
To Compile accurate tax liability, filing & returns
To Facilitate product costing & travel bill accounting
To Provide Financial accounting information
FINANCIAL PERFORMANCE. (`. in Millions)
PARTICULARS 2009-10 2008-09
Sales & Operating Revenues 833.90 970.98
Profit Before Tax 44.43 15.30
Provision For Tax 15.15 7.10
Profit After Tax 29.28 8.20
Surplus Brought Forward 12.85 10.89
Profit Avaialable For Appropriation 42.12 19.90
Sales and operating revenues were lower by 14%.
Operating profit recorded an impressive growth of 40% due to continuous focus on
reduction in inputs costs and better management of other costs.
Domestic original equipment manufacturer (OEM) sales had grown by 23% contribute
mainly by farm tractors, Heavy commercial vehicle and industrial engines.
Replacement market has shown robust growth of 24% during the year.
Exports were lower in OEM & aftermarket segments due to lower off take and reduction
of inventory by dealers in US and Europe.
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FINANCIAL AND OPEATIONAL PERFORMANCE
Company operates in a single segment viz., automotive industry.
The operating result for the year was higher compared to previous year mainly due to
reduction in raw material cost and employee cost.
Better management of inventories and receivables has contributed in reduction in interest
cost
Prices of commodities like steel and oil have shown stable trend.
The company took various remedial measures to mitigate exchange risk and implement
productivity and yield improvement projects to contain employee and raw materials
costs.
The company has established goods export business base with customers in US and
Europe.
The business in the current year was badly affected as most of the big buyers especially
in locomotive and off road vehicle business started controlling inventory.
Export market showed some sign of improvements from December 2009 onwards and we
expect some good recovery in the nest year.
HUMAN RESOURCE DEPARTMENT
The company attaches considerable importance to Human Resource Development. The
management is continuously working on the development of human capital, vital, in an ever
changing business environment towards achieving the goals and realizing the vision of the
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Senior manager HR
Manager (tumkur)Asst manager
Senior executive
Executives
[Type text]
company. “Rane Institute for Employee Development” is a group resource that imparts training
towards continuous enhancement of technical and managerial skills and building managers for
the future. The human resource department of Kar Mobiles Limited is headed by
Mr.B.Ravichandra.
STRUCTURE OF HR DEPARTMENT
FUNCTIONS OF HR DEPARTMENT
Human resources department’s main responsibility is the recruitment, selection, training
and development of staff. This will involve developing staff to maximise their potential in a
manner that furthers the organisations objectives.
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President
Senior executive
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Human resources may also need to comply with legislation applicable to the country in which
they are based. For example in the UK employers will need to maintain accurate personal records
in a manner that is compliant with the UK Data Protection Act 1984.
Human resources often adopt a welfare role which includes looking after employees
whilst they are at work. They may also create policies that balance organisational needs with
those of the employee. They will also interpret employee welfare legislation and ensure that the
organisation is complying with the applicable legislation.
PROCESS STEPS
Identify vacancies to be filled
Approve manpower requisition
Initiate recruitment process
HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS
Your Company attaches significant importance to Human Resource Development (HRD)
and harmonious industrial relations. The management is continuously working on the
development of human capital, which is very vital for achieving the goals and realizing the
Vision of the Company in an ever-changing and challenging business environment. “Rane
Institute for Employee Development” is a group resource that imparts training for enhancing
leadership and managerial skills. On an average each employee across all segments and divisions
is trained for 3.51 days. Total Employee Involvement is a key element of Total Quality
Management (TQM) that enables continuous improvement to all business processes. The
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Company conducts regular Employee Opinion Surveys, the outcome of which is shared with the
employees, deliberated and acted upon. New strategies like multi skilling, competency
enhancement initiatives and enhancing managerial depth and bandwidth are being progressively
implemented to optimize employee costs and improve productivity.
EMPLOYEES’ DETAILS AT KAR MOBILES LTD:
BANGALORE-800
Management staff- 138
Temporary operators- 210
Apprentices- 110
Diploma operators- 55
Contract labor- 90
Operators- 180
TUMKUR-315
ATTRITION RATE 4.5%
SOURCES OF RECRUITMENT
HR will choose one of following methods of sourcing:
Internal source
external sources
Campus selection
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Through consultants or websites
Employee reference schemes
Walk-in interviews (rarely)
Recruitment is done depending on the vacancies. The process followed for recruitment is as
under:
Scrutinizing the CV
Written test
Interview
Psychological test
Medical check up
Offer and appointment.
TRAINING AND DEVELOPMENT:
On the job training
Off the job training
LEVELS OF EVALUATION:
Key result areas-plan vs. actual
Innovativeness, creativity and improvements in projects.
Managerial leadership, core competencies
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The ratio of above three varies for different categories. Leadership qualities are given importance
for senior level management.
Workmen evaluation is based on attendance and production output.
PERFORMANCE APPRAISAL METHODS:
Forced distribution method
Straight ranking method
Compensation is based on the performance appraisal rating.
COMPENSATIONS:
Workmen compensation
Salary
Production incentives
Production related performance.
Profit sharing bonus
Non-workmen: there are totally 8-9 grades
Salary
Bonus
No incentives
Salary is paid on different scales depending on the qualification of the employees.
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Staff salary is revised every year based on employee’s performance appraisal.
Workmen salary is revised once in 4 years based on negotiation and collective bargaining
process.
SAFETY AND SECURITY MEASURES
Kar mobiles ltd provides all the required safety and security measures in order to protect the
workers from accident as per the statutory provisions laid down in labor law and various other
laws in order to protect the welfare of employees. Few safety and security measures are as under:
Medical facility for first aid
There is a union for job security
The company also contributes for the personal accident policy coverage, only if the accident
has taken place inside the factory and not by negligence of the employee.
WELFARE FACILITIES:
Recreation facilities
Ambulance facility
Canteen facility
Uniformity and disciplined
Employee state insurance
Employee co-operative society
Provident fund
Sports club
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Language club (kannada sanga)
MAINTAINENCE AND DISCIPLINE AT WORK PLACE
The workmen and the union have agreed to work for the entire shift hours excluding
lunch break.
The workmen shall not stop their machines in between the working hours.
They honestly and sincerely work for entire shifts hours without wasting time.
Workmen shall also work anywhere within the line or any line wherever the supervisor
deploys him.
Workmen shall adhere to multi skills and multi machine manning.
The workmen shall not get out of the factory premises without prior notice.
The workmen shall not loiter within the factory premises unnecessarily and waste their
time.
Operators shall set their machines.
Operators shall do tool grinding/forming, whenever necessary. Supervisors will also
assist.
Operators have to do regular optimal checks, TPM/ Kaizen suggestion scheme multi
machine manning, 5s and safety.
MOTIVATION TECHNIQUES:
Employee will be given a cash award for his innovative ideas and techniques, which
serves the best interest of the organization.
Implementation of new ideas and 20% of profit gained from it is given to that person.
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Innovation of new skills and maintaining the past are also given gifts and rewards.
Suggestions from employees to reduce scrap.
If an employee shows continuous improvement in his current job is awarded with
momentous.
Employee union is also encouraged to participate in management decision process to
certain extent.
There are various committees like canteen committee and safety committee.
GRIEVIANCE HANDLING:
If there are any deficiencies in the work place or any grievances faced by employees will be
handled by the immediate boss or department head or by the HR.
Grievance interviews takes place very often and instant solutions will be given.
Only genuine grievance will be considered.
LEAVE FACILITIES:
Total number of leaves available for an employee in a year is 49 days.
TYPES OF LEAVES:
Earned leave
Casual leave
Sick leave
Restricted leave
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In case of leave taken for more than 8 days without prior notice, the concerned department
will have the right to terminate the services of the employee.
AWARDS:
Long service awards are given to the employees as under:
SERVICE AWARD
10 Years continuous service Titan watch with service certificate.
15 years continuous service 140gms Silver plate with service certificate.
20 years continuous service 4gms Gold coin with service certificate.
25 years continuous service 8 gms Gold coin with service certificate.
30 years continuous service 10gms gold coin with service certificate.
35 Years continuous service 12gms gold coin with service certificate.
PROMOTION POLICY:
Employees’/unionized staff will continue to be considered for promotion as per the existing
promotion policy.
Fitment in the new grade consequent on promotion will be subject to the conditioned that the
promoted workmen/employees do not cross the senior employees in the new grade, except for
employees who have got converted to staff/ reclassified. In such cases, the existing practice of
maintaining the wage parity between the junior and senior workmen/employees will continue till
disparity is rectified.
In case of promotion, the decision and placement will be at the discretion of the management.
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Management has also informed the union it will come out with new promotion policy within
3months from the date of signing of this settlement for discussion and conclusion.
I T DEPARTMENT
STRUCTURE OF IT DEPARTMENT
UNDER SAP
Material management
Sales and distribution planning
Production planning
Quality management
Plant maintenance.
Finance and costing
And for HR PAYROLL
And for marketing coupon monitoring system for sales promotion
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PRESIDENT
SENIOR MANAGER
INCHARGE I T
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Databases of employees are maintained
At company level each person has a head called ‘CHAMPIONS
The company is in the process of implementing MATERIALS REQUIREMENT
PLANNING AND MANUFACTURING RESOURCE PLANNING.
SAP- logical storage location
MASTER DATA IN PURCHASING
Material master: A central repository of information on materials for the enterprise which
contains information on Basic data, Purchasing, Inventory, Sales and Distribution, Accounting,
Material planning and control.
Material numbers can be assigned internally or externally that can contain a maximum of 18
Characters.
The material master contains all the information on all materials that a company procures,
produces, stores, and sells. The material master is used by all areas in the SAP Logistics system
such as purchasing, inventory management, material requirements planning (MRP), invoice
verification, and so on.
Vendor master: Vendor master database contains information about the vendors that supply an
enterprise. It contains :
Vendor’s name and address
Currency used for ordering from the vendor
Terms of payment
Control account (reconciliation account) in the general ledger
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Vendor number can be assigned internally or externally and can contain a maximum of
16 Characters.
Internal number assignment means that the system assigns vendor numbers, whereas
external number assignment means that the person creating the vendor master record does
so.
ACCOUNT GROUP
At the time of creation of Vendor Master Account group has to be specified. Account group
helps in identifying the nature of Vendor (Domestic/Import/Employee/one time vendor). It also
helps in specifying a numbering for the account group to easily distinguish the vendor.
Purchasing info records: recording of purchase information into the SAP
Source list: Source list specifies the possible sources of supply for a material over a
given period of time
Quota management: Used to divide the total requirement of a material over a period
among certain sources of supply by assigning a quota to each source.
Excise master: creation of excise master.
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QUALITY ASSURANCE DEPARTMENT
STRUCTURE OF DEPARTMENT
72
Plant head 1
Head plant quality
Process Audit Raw material AuditProduct Audit
[Type text]
SCOPE OF QUALITY MANAGEMENT SYSTEM
Manufacture and supply of Inlet and Exhaust valves for internal combustion engines for
automotive and non-automotive applications.
QUALITY OBJECTIVE
Company level data, customer requirements and business requirements are the basis for
finalizing quality objectives. A CROSS FUNCTIONAL TEAM consist of members from every
department will discuss based on the various inputs, company quality policy and finalize the year
objective, during every financial year-end. The objectives and targets once approved by
management will be included in the short-term business plan.
The finalized objectives and targets will be communicated to all departments and all departments
will work for achieving the year objectives. The action plan and achievements towards these
objectives will be tracked on a monthly basis by the department and reviewed during the
management review.
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Material lab
Customer complaints
Gauge room
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RESPONSIBILITY FOR QUALITY
Manager –Quality Assurance is responsible for product quality. All product quality issues
including internal rejections and customer complaints are reported to Manager-QA. He with the
help of QA department and manufacturing plants ensures product quality.
In all shifts product quality is ensured through routine inspection and testing by production
department and QA department. In all shifts sufficient engineers (line engineers) are engaged for
ensuring product quality.
Management representative
Mr. R.Sreedharan – Manager-QA is the Management representative for both plants
Establishing, implementing and maintaining quality management system, in accordance
with ISO/TS 16949:2002.
Planning and carryout internal quality audits
Carrying out review of quality management system along with management.
Reporting the performance of quality management system to the management.
Creating awareness on customer requirement throughout the organization
Liaisoning with external agencies like certifying body and customers on quality
management system.
CUSTOMER REPRESENTATIVE
Mr. R.Sreedharan – Manager-QA is the customer representative for Interacting with customers to
understand customer specific requirements with reference to quality management system,
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selection of special characteristics, setting quality objectives, training, corrective & preventive
actions and product design and development.
He will communicate these requirements to the respective department /persons in the
organization.
TESTING & VALIDATION
Meticulously planned testing routine to ensure conformance to quality.
Advanced testing equipments instituted to evaluate quality in minute detail.
7 QC TOOLS ADOPTED BY THE ORGANISATION FOR CONTROLLING QUALITY
OF THE PRODUCT
Pareto chart
Cause and effect diagram
Histogram
Stratification
Scatter diagram
Control charts
Check sheets
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QUALITY ASSURANCE FACILITIES
Hardness Testers - Rockwell & Vickers
Automatic Specimen Polishing Machine
Spectrophotometer
Metallurgical Microscope
Tensile Testers
Micro Profile Projectors
Tool-maker's Microscopes
Roundness Testers
Surface Roughness Testers
Dial calibration Testers
Cylindricity Tester
Magnetic Particle Inspection
Ultrasonic Testers
Hardness Test
PRODUCTION PLANNING AND CONTROL DEPARTMENT
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PRODUCTION PROCESS
Production planning is used to determine production levels for product groups. This is based on
sales forecasting and is used to raise or lower inventories, stabilize production and planning and
allow the launching of new products onto the manufacturers range of products.
Process Planning determines the sequence of operations required in the manufacture of a product
or its components. Estimating is to determine prices and predicting costs including
manufacturing lead times and production costs. Production costs include materials, labor and
general overhead costs needed to manufacture the end product. The data for this is supplied from
purchase files, route sheets and accounts records.
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Marketing plan
Daily forging dispatch plan
Weekly bonding plan line wise
Monthly production plan
Daily bonding plan
In charge PPC-machine shop
Shift in charge-1 PPC Machine shop
Shift in charge-2 PPC machine shop
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STRUCTURE OF PRODUCTION PLANNING AND CONTROL DEPARTMENT.
PRODUCTION FACILITIES:
Two manufacturing plants producing over 6.5 million valves per annum,
Access to the latest product and process technology.
Special Purpose Machines made in-house for captive usage.
Product lines with robust process & stable.
Separate Production Lines to manufacture valves for Applications Ranging from Motor
Cycle to Locomotive & Marine Engines.
Friction Welders
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Plant head operations
Head PPC
In charge PPC forge shop
Shift in charge-1 PPC Forge shop
Shift in charge-2 PPC machine shop
[Type text]
Electro Hydraulic up-setters
Tig welding machines
Projection welder
Friction Screw Presses
Valve Straightening Machines
Electric Hardening & Tempering Furnaces
Centre-less Grinders
Induction hardening machines
CNC turning machine Valve seat grinders
PRODUCTION PROCESS
The company manufactures valve only after receiving the orders from its customers. The
production department starts its work when it receives order from marketing department.
According to customer requirement Engineering department make a sketch or model with all
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measurements. After customer satisfaction they fix the deal and the process begins in material
department.
MONOMETAL VALVE
BARCUT – At first, the raw materials are taken from the stores. In BAR CUT process they cut
the Bar according to customer requirement. It includes thickness of the product, size, length etc.
DEBUR PROCESS – Bar cut process leave some extra edges that are removed by DEBUR
PROCESS.
BAR GRINDING – In BAR GRINDING process an angle is made on the top of the bar.
END TOUCH – Next process includes the finishing of both the surfaces; this process is called
END TOUCH.
FORGING PROCESS – In FORGING PROCESS a high voltage will be applied to one end of
the bar. Due to high voltage and force, a bulb will be formed at this end and it will be pressed to
give required valve shape.
HEATING TREATMENT – After forging process, valve will be given HEATING
TREATMENT for hardening and tempering.
OILING TREATMENT – Then OILING TREATMENT will be applied for softening and
increasing the durability of the valve.
STRAIGHTENING – In heating process valve becomes bent due to distortion but vehicles
require only straight valve so for becoming straight the valve, STRAIGHTENING process will
be applied.
Above all procedure is done in FORGE SHOP. After forge shop valve will go in MACHINE
SHOP for final finishing, cleaning, polishing, marking, correct measurement and packing.
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BAR TO BAR PROCESS (BIMETAL)
Bimetal is used for increasing the length of the valve. If any vehicle requires valve of long length
then starting material of valve will be of high alloy and ending material will be of low alloy. The
main aim of this process is to reduce the cost of valve.
Following flow chart is showing the process of making bimetal valve –
The basic important document, which should be prepared by the organization i.e. annual
operating plan, which is prepared in the month of March for the next accounting year. Based on
the annual operating plan budgets of each department are estimated and customer requirements
are assessed and production planning is done.
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Based on the marketing priority or review, which is held on every Saturday, to discuss what are
part numbers to be produced based on that route card is prepared which contains all the
necessary details about the product to released right from the stage of releasing the raw materials
to final product. Each kind of material has different route cards. Route card helps in tracing of a
product and which helps to know the position the product. C code in the route card helps in the
verification of metal stock. Cut bar code is also verified in the route card.
FLOW OF ROUTE CARD:
BAR SHOP ROUTE CARD FORGE SHOP FORGING HEAT TREATMENT STRAITENING DESCALE HARDENING AND TEMPERING
RUN OUT CHECKING CONFIRM STRAIGHTNESS.
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Groove turning Wet end Oil dipping Packing
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MAINTENANCE DEPARTMENT
STRUCTURE OF DEPARTMENT
.
FOR ASSETS THERE IS CIVIL MAINTENANCE
In KML they follow both breakdown and predictive maintenance these are time based
maintenance and condition based maintenance
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Plant head maintenance
Shop in charge
Machine shopForge shop
Plant head
Utilities
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In kml they do sewage treatment where in the segregate the chemicals with water and these
waters are reused for gardening purpose.
The max breakdown so far recorded is 4hrs and above and they are trying to keep the machinery
uptime by 98%
Costs incurred are :
Repair and maintenance cost
Reconditioning of old machines etc
Machinery spares and services
New machine procurement
PROCEDURE FOR TOOL MAINTENANCE SYSTEM
The objective of this procedure is :
To maintain tooling’s properly
To support the production to achieve the targets on time
To provide valuable service to the production department
DESCRIPTION
Based on the monthly production schedule, Tool crib shall maintain the tooling in the tool
crib.
If the toolings are not sufficient to meet the scheduled quantity, raise the purchase order to
procure sufficient tooling.
After tool life over, the non usable tool shall be returned to Tool crib and new tool / repaired
and inspected tool shall be issued.
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Received tools shall be inspected. Whether can it be reworked?
If it can be reusable after repair, the tool is sent for repair with proper document to Tool room
or outside for repair.
If it is not usable, Move the tool with the red tag or red paint mark to the scrap location.
After repair, the tool is returned to tool crib with proper identification as repaired from the
tool room.
Tool crib should inspect the tool whether it is as per the requirement or not with the help of
tool drawing.
If it is OK, put the tool in the specified location.
If it is not OK, return the tool to the tool room for further rework or scrap with proper
identification.
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MATERIALS DEPARTMENT
STRUCTURE OF MATERIAL DEPARTMENT
The purchase department or materials department is headed by senior manager-Materials who
reports to the President. There are four departments under materials department. Senior
executives are responsible for each activity. Mr.G.V.Ravikumar heads the purchase department
of Kar Mobiles Limited.
The Purchase department is in-charge of all the purchases made by the company. Head of the
concerned department will inform the purchase department about the requirements. This
department is in-charge for the purchases of raw materials for the manufacturing of valves. They
will be given a three month prior intend by the production, planning and control department
which includes the required quantity of raw materials and days within which it has to be
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Senior manager-materials
President
Purchases Stores consumable Raw materials Sub contracting
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available. Then the department will place the purchase requisition to the suppliers. When the
goods are received it is given a GR number (Goods Receipt Number) and is transferred to stores.
The user will raise the indent in the system about the quantity required and give reservation
number for the required raw materials. Based on the order the material will be issued.
In some cases when the normal stock falls down it is also informed to the purchase department
by the stores in order to buy the raw materials to maintain the stock. The company has a storage
capacity of 7000 items in their department. Kar Mobiles Limited has established domestic and
overseas suppliers. Normally the contract is for one year and it is renewed every year.
The purchase department will receive three months requirement of raw materials from the
marketing department based on customer’s order and based on annual operating plan and
statement of raw materials will be prepared consisting of:
Raw material requirement
Stock inside the plant
Order pending on vendors
Materials under transit.
New product to existing customers.
Existing products to new customers.
New products to new customers.
Lead time for imported materials is 6 months and materials reorder level is calculated using SAP.
Approximately there will be 80-90 tons of orders are placed. Materials are released based on
first-in first out basis. All bars are colored based on international standard for easy identification
of use.
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Major suppliers are:
Star ware india ltd.
Kalyani carpenters.
Jigar marketing pvt ltd.
Hall mark steel pvt ltd.
Carpenter technology (us).
Thyssen krupp (germany).
Mitsui (japan).
Incanal pvt ltd.
The stores consist of direct materials i.e. raw materials and indirect materials which consist of
consumables, mechanical and electrical spares.
At present the company has:
Raw materials worth 283lakhs.
Consumables worth 45lakhs.
55lakhs worth of mechanical and electrical spares.
MATERIAL USED:
Low Carbon Steel
Martensitic Valve steel
Austenitic Valve steel
Nickel Alloy
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Stainless steel
Surface Treatment
Hard Chrome Plated
Tufftrided
Phosphates
ENGINEERING DEPARTMENT
STRUCTURE OF DEPARTMENT
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In charge design and drafting
In charge drawing development
In charge new product development
Head engineering
In charge tool crib design and drafting
In charge capex and machine build projects
In charge ME- forge shop
President
In charge tool room
In charge toolingIn charge ME- machine shop
In charge machine building and tryouts mechanical
In charge SAP doc In charge product management and sample
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The engineering department is headed by Mr. Radhakrishanan who directly reports to president.
The main responsibilities of this department are
Translation of customer drawing into plan.
Assess capacity of the machine.
New product development.
To procure equipments/machinery from local/overseas.
To handle the equipments.
Method of manufacturing and Machine building.
Designing and drafting of tools.
Capital expenditure
Based on the customer requirements the engineering department translates the customer drawing
into plan and they try to assess the present capacity, and method of manufacturing and tries to
procure the required equipment and design the dice which are designed in-house/procured
outside.
The company uses normal drafting software for designing the product. Nearly 230-240 new
products are developed in a year.
DESIGN AND DEVELOPMENT TECHNIQUE
Centralized R&D and Product Engineering Function responsible for customer
interaction and product design.
Specialists in IC Engines, CAE & CAD Application.
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NPD Process aligned to ISO/TS 16949: 2002 requirements.
Concepts like QFD, Design Reviews adopted from Japanese practices.
Software Capabilities - AutoCAD, Pro-E & Ansys.
TESTING CAPABILITY
Endurance Test done for concept proving and design validation
Power, SFC in the engine and wear & distortion on the product are measured
Valve temperature measurement can also be done based on customer requirement.
SWOT ANALYSIS
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SWOT ANALYSIS
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves specifying
the objective of the business venture or project and identifying the internal and external factors
that are favorable and unfavorable to achieve that objective. The technique is credited to Albert
Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from
Fortune 500 companies.
A SWOT analysis must first start with defining a desired end state or objective. A SWOT
analysis may be incorporated into the strategic planning model. Strategic Planning has been the
subject of much research.
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Strengths: attributes of the person or company that is helpful to achieving the
objective(s).
Weaknesses: attributes of the person or company that is harmful to achieving the
objective(s).
Opportunities: external conditions that is helpful to achieving the objective(s).
Threats: external conditions which could do damage to the objective(s).
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs.
First, the decision makers have to determine whether the objective is attainable, given the
SWOTs. If the objective is NOT attainable a different objective must be selected and the process
repeated.
The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses,
opportunities and threats. It is particularly helpful in identifying areas for development.
STRENGHT(S):
Recognized as a medium and large valve manufacturer
Strong presence in locomotive segments
High brand equity in served markets
Excellent Relationship with key customers
Vast dealer network and field force
Technical Collaboration with TRW Incl. USA
Export oriented plant at Tumkur
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Specialization in valves
Practice of TQM resulting continuous productivity gains.
Capability to manufacture large valves
Skilled manpower
Wide range of products at industry level
Experience in handling overseas customers
The Company has a wide dealer network and field force spread across around the world.
Specialization in valves
The company has a capacity to produce 8 million valves per annum.
Provide effective information support
Research and development efforts to upgrade products/processes have continued to yield
good results.
Adheres to strict quality controls
WEAKNESS:
Inadequate focus on cost reduction
Lack of process robustness
Limited knowledge of large valve manufacturing
Limited knowledge of large valve markets
Low investment in technology up gradation
Highly sensitive raw materials
Inability to meet the requirements
Low productivity
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Inadequate failure
Communication gap Increasing low volume requirements
Changing product / market mix
Poor process capability
Inadequate focus on exports
Poorly maintained machines
Weak in technological innovations
Lack of pride in workmanship
Insensitivity to customers
High wage cost
Inadequate systems
Low competencies
The company is exposed to cyclical downturns in the Automotive Industry
Dependence on Original Equipment Manufacturers
The company is locking up funds in idle assets thereby resulting in improper cash
management.
Longer operating cycle resulting in increased working capital requirement.
Due to increased competition and pressure from OEM customers especially in passenger
car segments, the company’s product prices may come down in future which may have
an adverse effect on profits of the company.
OPPORTUNITIES:
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India has averted the effects of the global slump and continues to grow at a healthy 7-8
%.
More and more multinational companies are now targeting India as the hub for
manufacturing and exporting.
Many global Automobile manufacturers have set up bases here and actively pursuing
sourcing from here. This provides good opportunity to component manufacturer for
accelerated growth.
Outsourcing by valve manufacturers in high cost countries
Increased outsourcing by international customers
Growth opportunities in after Market
The continued attraction of the Indian Auto component Industry as an outsourcing hub
presents immense opportunities for growth.
Win market share from high cost competitors in overseas market
Exploit large & growing domestic two wheeler market
Participation in global outsourcing
Manufacturing / trading of related engine components
CNC machining
The Company is exploring growth opportunities while retaining current customers who
are likely to recover once economic scenario recovers in USA and Europe.
Significant Export opportunities may be realized through diversification of export basket.
THREATS:
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Dumping from China and cheaper imports from other low cost countries.
More competition since there are no growth opportunities for MNCs elsewhere
The presence of a large counterfeit components market poses a significant threat
Volatility in commodities and exchange rates
Price Competition from other emerging countries
Increasing domestic competition
Volatility in commodities and Exchange rates
Limited growth rate in the aftermarket as a result of enhanced durability of engine
valves
The presence of spurious products in the replacement market
Volatility in commodity prices- steel and other inputs
Currency fluctuations
Competition from Italy, Argentina, China & Taiwan
Imports pose price based competition in the replacement market
Due to increased competition and pressure from OEM customers especially in
passenger car segments, the company’s product prices may come down in future
which may have an adverse effect on profits of the company.
The major portion of the Company’s export receivables are denominated in US
Dollar, while most of the input costs are incurred in Indian Rupees and Japanese Yen.
The strengthening of Indian Rupee with respect to USD could adversely impact the
profitability of export sales and this situation could continue if the Indian Rupee
continues to appreciate against USD.
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Further slowdown in the domestic economy may result in lower off take by OES and
Institutional customers.
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METHODOLOGY
METHODOLOGY OF THE STUDY
This section outlines the techniques used to gather the data. Explaining the methodology
aids in validating that the study was thorough in its approach and accurate in its finding. The
analysis of the financial performance of the company necessitates accurate and reliable data.
Therefore, the sources for collecting the data include both primary and secondary.
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PRIMARY DATA
Primary data is the data obtained directly from the concerned personnel.
Types of primary data used for the study are:
Direct discussions with department senior managers.
Direct Observation.
SECONDARY DATA
Secondary data is collected from company annual report and profile, journals, internet, articles,
company website and other official records of the company. Reliability, Suitability and adequacy
of data are thoroughly checked.
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FINDINGS AND ANALYSIS
FINDINGS
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Based on the organizational study through 7’S McKinsey model tool and SWOT Analysis, the
following findings have been listed.
The Company has:
Good work environment.
Excellent relationship with key customer.
Strong presence in locomotive segments.
Inadequate focus on cost reduction.
Limited knowledge of large valve manufacturing.
Low investment in technology up gradation.
Highly sensitive raw materials are used by the company which involves huge investment.
Increasing domestic competition.
Price competition from other emerging countries.
The company has established good export business base with customers in US and
Europe.
The operating result for the year was higher compared to previous year mainly due to
reduction in raw material cost and employee cost.
Better management of inventories and receivable has contributed in reduction in interest
cost.
Prices of commodities like steel and oil have shown stable trend.
Export markets showed some sign of improvements from December 2009 onwards and
expect some good recovery in the next year.
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The business in the current year was badly affected as most of the big buyers especially
in locomotive and off road vehicle business started controlling inventory.
Exports were lower in OEM & aftermarket segments due to lower off take and reduction
of inventory by dealers in US and Europe.
Replacement market has shown robust growth of 24% during the year.
Sales and operating revenues were lower by 14%.
Operating profit recorded an impressive growth of 40% due to continuous focus on
reduction in input costs and better management of other costs.
Domestic original equipment manufacturer sales had grown by 23% contributed mainly
by farm tractors, heavy commercial vehicle and industrial engines.
Even during the recessionary year they add few more potential customers. This should
help in the future growth of this segment.
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SUGGESTIONS
SUGGESTIONS
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Company should focus to control the cost where it spent more on raw materials and other
things.
Company should invest on up gradation of technology, which is more important to
improve the quality and product standard.
Company is having limited space for the materials. Company has to make some sufficient
space for the storage of materials.
Pricing strategy should be adopted because of the competition of other emerging
countries.
There is domestic competition which should be overcome by producing more quality
products for its customer with proper price.
Company should provide knowledge for manufacturing large valve.
The company should enhance the welfare facilities as it is already providing to its
employees in order to maintain the current level of satisfaction and employee
productivity.
Company should have to appoint some costing expert who can handle the costing
department as there is requirement in the company.
Company should have to implement SAP in more organized manner.
The above suggestions and recommendation are based on the observation. The
organization can benefit by taking a closer look at the above issues and by implementing them.
All this can increase worker’s motivation, morale and productivity. It also increases the loyalty
and commitment to the organization.
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CONCLUSIONS
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CONCLUSIONS
The study of organizational analysis at KAR MOBILES LIMITED was done to partial
fulfillment of Bharathiyar University for the award of MBA. It was found from the financial
status of the company that profitability of the company has increased which shows company is
doing well.
In the present period it is necessary to adopt certain measures to reach global demand efficiently.
Kar Mobiles is no doubt marching confidently a head in new millennium.
Competition is becoming tougher and more number of brands coming day by day. To decide the
future of the company it is important adopt marketing strategy and it is also getting importance in
today’s market. To market a strong mark on consumer mind in the long run it is necessary for the
companies to take risk and risk is predominant today.
Today multinational companies entered Indian market in a big way, because of that more number
of brands available in market with same price it is necessary to adopt cost cutting measures to
reduce price by maintaining the same quality.
Company should focus on the improvement of cost management and new product developments.
It should also focus on further exports and effective internal control system to be more cost
competitive and carry on their business in this dynamic and growing economy.
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BIBLIOGRAPHY
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BIBLIOGRAPHY
Production Technology, by R.K. Jain
Sixteenth Edition, Khanna Publishers
Operations Management, by K. Shridhara Bhat
First Edition, Himalaya Publishing House
Business Environment, by Francis Cherunilam
Eighteenth Edition, Himalaya Publishing House
Human Recourse Management, Gary Dessler
Eleventh Edition, Pearson Publishers
Essentials of Management, By Koontz & Weirich
Tata McGraw Hill
Management, VSP Rao, V Hari Krishna
I Edition, 2004
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