Organizational Study - Kar Mobiles Ltd

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[Type text] 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 1

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

[Type text]

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.

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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

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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

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Plant head 1

Head plant quality

Process Audit Raw material AuditProduct Audit

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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

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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

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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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