SUMMER TRAINING REPORT
On
Project topic
Study on marketing activities
Company name- CROMPTON GREAVES LIMITED
Submitted by
Yogesh Sharma
Roll No: -20090126
Batch: 2009-2011
2
ACKNOWLEDGEMENT
It gives me great pleasure to express my deep sense of gratitude to …Mr. Ramuavtar Dixit…senior
sales executive Marketing, without whose patient guidance and constant encouragement this study
would not have come to its present form. I am sincerely thankful to him for permitting me to work on
a topic of special interest to me for study. I owe him a debt of gratitude for constructive criticism from
time to time during the course of these investigations.
I am also highly grateful to other faculty members for providing all facilities for carrying out this
project work.
My sincere thanks must go to my family members who showed patience and forbearance during the
period of our study.
Name
Yogesh Sharma
IILM management school
New Delhi
3
Contents Introduction ............................................................................................................................................ 4
PROJECT TOPIC................................................................................................................ ........................ 4
History ................................................................................................................................................ 5
Major Acquisitions................................................................................................................................... 6
Product & Services Offered By Crompton ................................................................................................ 6
BRANCH OFFICES................................................................................................................................. 7
Service Centers ................................................................................................................................. 10
Financial Analysis of CGL........................................................................................................................ 11
Total Income and Profit After Tax Of CGL Stand Alone................................................................... 11
CGL - Consolidated Revenue By Business....................................................................................... 12
CGL performance .............................................................................................................................. 13
CGL Transformers Division..................................................................................................................... 14
Manufacture of Distribution Transformer, Malanpur (M.P.) .............................................................. 16
Financial Analysis .............................................................................................................................. 17
SWOT ANALYSIS .................................................................................................................................... 18
Organization Structure ...................................................................................................................... 20
Competitors Analysis............................................................................................................................. 21
Composition Of Market Share For Transformers –In Terms Of Sales Value Cgl And Others
Companies .................................................................................................................................... 21
MARKET CAPACITY OF TRANSFORMER MANUFACTURER IN INDIA .................................................... 21
Description of Various Departments Marketing..................................................................................... 30
Production - Design, Manufacturing and Testing Equipment ............................................................. 35
I. Product Design and Planning...................................................................................................... 37
II. Manufacturing process.............................................................................................................. 37
III. Testing: ............................................................................................................... ..................... 38
Finance ..................................................................................................................... ........................ 39
Six Sigma........................................................................................................................................... 40
Information Technology ................................................................................................................ 44
QUESTIONNAIRE ................................................................................................................................... 45
CONCLUSION................................................................................................................... ...................... 53
4
Introduction Crompton Greaves (CG) is the part of the US$ 3 billion Avantha Group, a conglomerate with an
impressive global foot print. Since its inception, CG has been synonymous with electricity. In 1875, a
Crompton 'dynamo' powered the world's very first electricity-lit house in Colchester, Essex, U.K. CG's
India operations were established in 1937, and since then the company has retained its leadership
position in the management and application of electrical energy.
Today, Crompton Greaves is India's largest private sector enterprise. It has diversified extensively and is
engaged in designing, manufacturing and marketing technologically advanced electrical products and
services related to power generation, transmission and distribution, besides executing turnkey projects.
The company is customer-centric in its focus and is the single largest source for a wide variety of
electrical equipments and products.
With several international acquisitions, Crompton Greaves is fast emerging as a first choice global
supplier for high quality electrical equipment
PROJECT TOPIC
Research on the effectiveness of marketing activities at CGL Distribution Transformer
Division (T2)
PROJECT OBJECTIVE
The project has been undertaken with following objectives in mind.
A detailed study on the performance of CGL T2 division for the past four
years.
Financial statement analysis
A detailed study on the marketing activities of T2 division
Identifying the problems faced by the marketing department and the
reasons for lower conversion rate of the sales enquires, which includes
Preparation of SWOT Analysis for the Tendering and Execution
departments.
To find out methods for improving the effectiveness of marketing
activities.
Data’s required Last four years order input
Last four years sales details
Last four years financial statements
History
Crompton Greaves goes back to 1878, when Col. R.E.B. Crompton founded R.E.B.Crompton & Company.
The company merged with F.A Parkinson in the year 1927 to form Crompton Parkinson Ltd., (CPL).
Greaves Cotton and Co (GCC) was appointed as their concessionaire in India. In 1937, CPL established,
it's wholly owned Indian subsidiary viz. Crompton Parkinson Works Ltd., in Bombay, along with a sales
organization, Greaves Cotton & Crompton Parkinson Ltd., in collaboration with GCC. In the year 1947,
with the dawn of Indian independence, the company was taken over by Lala Karamchand Thapar, an
eminent Indian industrialist. Crompton Greaves is headquartered in a self-owned landmark building at
Worli, Mumbai.
Today, Crompton Greaves (CG) is part of the US$ 3 billion Avantha Group, a conglomerate with an
impressive global footprint. Mr. Gautam Thapar, the third generation of Lala Karamchand Thapar, is
Chairman & CEO of India's foremost diversified corporation, the Avantha Group. Mr. Sudhir Mohan
Trehan is the Managing Director of Crompton Greaves Limited since May 2000. He was the recipient of
the ‘Outstanding Chief Executive of the Year’ Award for 2000-2001, instituted by the Indian Institution of
Industrial Engineering, for steps he took towards successfully implementing his vision of making
Crompton Greaves a world-class manufacturing company. In addition to above, the Board of Directors
includes the renowned names of Dr. O. Goswami, Mr. S. Labroo, Dr. Valentin A H von Massow, Ms. M.
Pudumjee, Mr. S.P. Talwar and Mr. S.R. Bayman.
5
6
Major Acquisitions
Pauwels Acquisition
Crompton Greaves has completed the acquisition of the Belgium-based Pauwels on 13th May 2005.
Ganz Acquisition
Crompton Greaves have also successfully acquired Hungarian based Ganz (GTV), engaged in the
manufacture of EHV Transformers, Switchgear, Gas Insulated Switchgear (GIS), Rotating Machines and
Contracting businesses and Transverticum Kft (TV), engaged in the supporting areas of design, erection,
commissioning and commercial activities on 17th October,2006; TV being a subsidiary of GTV.
Microsol Acquisition
The acquisition of Microsol Holdings Limited (MHL) and its associate companies in May 2007 is yet
another significant stride in CG's journey towards positioning itself as a Global T&D Solutions Provider.
Sonomatra Acquisition
Crompton Greaves concluded an arrangement for the acquisition of Societe Nouvelle de Maintenance
de Transformations (Sonomatra) of France in June 2008. Sonomatra provides on-site maintenance and
repair of power transformers and on-load tap changers, oil analysis, oil treatment and retro filling.
Product & Services Offered By Crompton The company is organized into three business groups viz. Power Systems, Industrial Systems, Consumer
Products. Nearly, two-thirds of it's turnover accrues from products lines in which it enjoys a leadership
position. Presently, the company is offering wide range of products such as power & industrial
transformers, HT circuit breakers, LT & HT motors, DC motors, traction motors, alternators/ generators,
railway signaling equipments, lighting products, fans, pumps and public switching, transmission and
access products. In addition to offering broad range of products, the company undertakes turnkey
7
projects from concept to commissioning. Apart from this, CG exports it's products to more than 60 countries worldwide, which includes the emerging South-East Asian and Latin American markets.
Thus, the company addresses all the segments of the power industry from complex industrial solutions
to basic household requirements. The fans and lighting businesses acquired “Super brand" status in January 2004. It is a unique recognition amongst the country's 134 selected brands by "Super brands", UK. DIVISIONS OF CGL
regional sales offices located in
Distribution Transformer Shunt Reactor
Crompton Greaves' strength emanates from its business operations consisting of 21 divisions
spread across in Gujarat, Maharashtra, Goa, Madhya Pradesh and Karnataka supported by well knitted marketing and service network through 14 branches in state capitals under overall management of four
Bushings Lighting Arrestor
Dry Type Transformer Bulbs, Tubes
Ceiling Fans
FHP Motors Pumps
Street Lighting
Chennai. Relays Rail Signalling Delhi, Kolkata, Mumbai and Stampings
HT Motors LT Motors Power Transformer REGIONAL OFFICES (ALL PRODUCTS) Switchgear
Alternators
BRANCH OFFICES
Instrument Transformer
8
Manufacturing Units
1. Manufacture of Domestic, Agro and Industrial Pumps, Ahmednagar (Maharashtra)
2. Manufacturing range of DC M/C and Railway Traction Motors, Mandideep (M.P.)
3. Manufacture DC Motors in the range of 1.2 to 450KW, Ahmednagar (Maharashtra)
4. Manufacture of Power Transformer and Shunt Reactor, Mumbai (Maharashtra)
5. Manufacture of Distribution Transformer, Malanpur (M.P.)
6. Manufacture of Power Transformers, Mandideep (M.P.)
7. Manufacture of Transformer-AMT Plant, Mandideep (M.P.)
8. Manufacture of Stampings for Motors, Mumbai (Maharashtra)
9. Manufactures High Voltage Induction Motors, Mandideep (M.P.)
10. Signalling Relay Unit, Pithampur (M.P.)
11. Luminaire Division, Mumbai (Maharashtra)
12. Fans & Appliances Division – I, Goa
13. Table Fans(Kundaim) Division, Goa
14. FHP Motors Division, Goa
15. LT Motors Division, Goa
16. Switchgear Division – EHV, Nashik (Maharashtra)
17. Digital-PSTA Manufacturing, Bangalore (Karnataka)
9
Transformers Plant, Mandideep Transformers Plant, Malanpur Alternators & DC Machines Plant,
Ahmednagar
LT Motors Plant, Ahmednagar.
DC Machines Shopfloor, Mandideep.
Research & Development Facility,
Transformers Plant, Kanjurmarg - Mumbai
Transformers Plant - Winding Bay, Kanjurmarg - Mumbai.
Switchgear Unit, Aurangabad
10
Kanjurmarg - Mumbai
Service Centers 1. Ahmadabad (Gujarat)
2. Bangalore (Karnataka)
3. Bhubaneswar (Orissa)
4. Cochin (Kerala)
5. New Delhi
6. Jaipur (Rajasthan)
7. Jalandhar (Punjab)
8. Kolkata (West Bengal)
9. Lucknow (U.P.)
10. Secunderabad (A.P.)
Year Total Income(cr) PAT(cr)
2005 2180 115
2006 2771 163
2007 3695 192
2008 4290 314
2009 4940 397
11
11. Patna (Bihar)CGL Manufacturing Units
Out of
Indi
12.
Financial Analysis of CGL
Total Income and Profit After Tax Of CGL Stand Alone
12
It is visible from the stats the CGL has been showing increasing profit after tax for last three years which
shows that the company has been growing well, this is the influence of the diversification strategy
followed by the company.
CGL - Consolidated Revenue By Business
The company has been showing increased significant revenues generated from the power segment of
the market, which shows are growth of the company and its success in the power segment.
The EPS of the company has increased as compared to the previous year this shows that the company is
performing well and has added to the wealth of the shareholders. Also the company has adopted a good
capital structure which has increased the company’s EPS and cash EPS. The Net Sales to Working Capital
is greater than one which means that the company is making good use of the working capital and is
generating sufficient funds to return the loans; the operating leverage of the company is near 13%
which shows that the company is making good profit. The company can make use of debt in its capital
structure since it has zero debt to equity ratio. Also, the interest coverage ratio has noticeably increased
which shows that company is making good use of the debt.
13
CGL performance
14
CGL Transformers Division
The transformers division of Crompton Greaves began operations over 60 years ago with their first
supply to the US Army. The initial inputs for technology came from collaborations with Brush
Transformers and Hawker Siddeley Power Systems of U.K. The company then forged a technology
arrangement with Westinghouse Electric Corporation U.S.A. for transformers of up to 400 kV to serve
international demand. The Transformer Division is the highest exporter of Power Transformers from
India, a position it has maintained consistently since 1997-98. Exports of the division amount to over
50% of the total transformer exports from India! Products of the Transformer division are exported to
15
over 40 countries worldwide. The Crompton Greaves Transformer division is known for its wide range,
reliable designs, excellent materials and globally benchmarked manufacturing practices.
Crompton Greaves is among the very few companies worldwide that designs and manufactures the
widest range of Power & Distribution Transformers and Reactors from 160kVA to 415MVA, 500kV Class
to fulfill the specific demands of the Power & Industrial sectors and the Railways. With an installed base
of over 120 million kVA in Transformers, Crompton Greaves has emerged as the largest Indian supplier
of a wide range of Transformers and Reactors for all critical applications. These Transformers and
Reactors find use in industries such as Power Utilities, Process Industries, Railways, Mines, Electricity
Boards, Industrial users etc in both the Domestic as well as Global markets.
The division has the capability to manufacture transformers from 400 kVA to 900,000 kVA (in a bank) 3.3
kVA to 500 kV class for various applications confirming to IS, IEC, EN, AS, BS, ANSI and other
international standards. All the plant operations are certified under the ISO 9001 and ISO 14,000. The
Division has technologically superior manufacturing facilities in Mumbai, Gwalior and Bhopal with a total
installed capacity of 18,500 MVA. Crompton Greaves incorporates the latest technology, superior raw
materials and state-of-art manufacturing facilities to build transformers of superior quality and with high
degree of reliability.
The four transformer manufacturing facilities of CGL are listed below:
1. Manufacture of Power Transformer and Shunt Reactor, Mumbai (Maharashtra)
2. Manufacture of Distribution Transformer, Malanpur (M.P.)
3. Manufacture of Power Transformers, Mandideep (M.P.)
4. Manufacture of Transformer-AMT Plant, Mandideep (M.P.)
16
Manufacture of Distribution Transformer, Malanpur (M.P.)
Bhopal plant covers an area of over 30,000 sq meters. The Kanjur Plant in Mumbai manufactures Power
Transformers up to 400 KV and Shunt Reactors. The Mandideep plant manufactures Power
Transformers of 132 & 230 KV range.
The new integrated Distribution Transformer division (T2) at Malanpur is spread over 20,000 sq meters.
The Malanpur plant manufactures Distribution Transformers up to 20MVA, 66 KV.
The consumer products of the plant are customized and are assembled according to the needs of the
customers, Job type of production is carried out.
Based on function the transformers can broadly be divided into Power transformers, Distribution
transformers and other types of special transformers for welding, traction, furnace etc.
1) Low Power Transformers: The power transformers are used to transform power voltage from
the generation point to the transmission point and are installed at the generation site right up to
the last substation just before distribution activities commence. This transformer is used to
either step up or step down power to match the voltage requirements. They are oil filled
transformers with its range spanning from 11kV – 765kV. Power transformers would account for
about 65-68% of the total value of the transformer industry.
2) Distribution Transformers: A distribution transformer is used to transform power voltage from a
substation to final end of consumption. The basic purpose of a distribution transformer is to
provide end user with low voltage power. A distribution transformer could either be oil filled or
dry type by nature, with range spanning from 1.1 kV to 11kV. Distribution transformer would
account for the remaining 32 -35 % of the total value of the transformer industry.
3) CR Transformers: A dry type transformer is used where there is space constraint and higher
chances of occurrence of fire. Special fire resistant insulation is used in this type of transformers.
These are mostly used by industrial and corporate clients at software parks, hotels, hospitals,
high rise buildings etc. These transformers are categorized as distribution transformers due to
their nature of operation, i.e. at the end users locations.
Financial Analysis NET SALES (FY2006-FY2010)
Year CG DT T2 Division(in lacs) Rate Of Growth CG Power System Asia(in lacs) Rate Of Growth % share of T
2005-06 2006-07 2007-08
9513 12576 17909
32.7 32.2 42.41
115318 170644 187346
37.42 47.98 9.79
8.2 7.4 9.6
2008-009 20410 13.97 231179 23.40 8.8
2009-10 21268 4.20 269670 16.65 7.9
The Unit’s net sales increased at almost 33% in the financial year 2006 and 2007 which is quite
proportionate to the growth rate of the Power System Asia which was 38% and 48% in the year 2006 and 2007 proportionately. The net sales growth rate for Asia in the year 2008 was about 10% on the
other hand the sales for CG D2 T2 plant increased by approx. 43%. The Net Sales for this plant has increased by 14% and 4% in the year 2009 and 2010 respectively. The T2 unit Malanpur accounts for about 7% to 10% of the Nest Sales of the CGL PS Asia.
The division’s profit has significantly mounted up in the past three years as can be easily visualized from the chart.
17
SWOT ANALYSIS Situation analysis begins the process of strategy formulation and there is need to find external opportunities and internal strengths. The individual parameters are hereby listed- STRENGTHS
Wide product range to provide solutions to different customer segments
like Thermal / Hydro power generation clients , transmission agencies ,
distribution and industries . Maj or presence in domestic power market and wide installed equipment / customer base. Prompt after sales service, understanding of Indian conditions & wide
geographical spread Significant technology absorption and adaptation capability to suit local
needs. Contemporary integrated manufacturing base and infrastructure Highly committed engineering, technical and managerial manpower International quality ( ISO 9000/9001:2000/14001 series, OHSAS 18001,
etc.) at competitive prices Strategic Management with a blend of
appropriate measures. WEAKNESSES
Technology development constraints. Limited financing capacity for large EPC projects & uncompetitive financing costs.
Operational constraints (flexibility, speed of response etc.) vis-à-vis
competitors.
18
higher Inadequate recovery from traditional customers – Utilities / SEBs
working capital requirements adversely affecting profitability
Less than 20 % of the sales enquires are being attended and converted into orders. OPPORTUNITIES
Growth rate of economy envisaged (6-8% p.a.) in next few years to
stimulate large demand in infrastructure. Government has fixed up the target of 78,577 MW of capacity addition for XIth Plan (2007-08 to 2011-12). Boost to power transmission sector & privatization moves i n distri bution sector. The total transmission capacity is planned to increase from the existing
capacity of 9,450 MW to 37,150 MW by 2012.
To secure cheaper power through large size power projects, the
government launched Ultra Mega Power Projects (UMPPs) with the target
to produce 4000 MW by 2012. THREATS
Delay / deferment of projects adverse impact on domestic business.
Technology leaders unwilling to share new technologies and insisting on
their terms / imposing Licensing restrictions on Territories. International players consolidating & setting-up local manufacturing bases. Increasing competition from large MNCs with greater financial & strategic
muscle and speedier response.
Lowering of Import Tariffs below the WTO bound rates Continued
customers insistence on qualification/ experience requirements
Roadblocks for introduction of Indigenous Technologies. 19
Departments No. of employees Production 14
20
Organization Structure
Marketing 5
Quality Assurance 11
Services 2
Design 14
Six Sigma 2
Engineering 2
Maintenance 2
Finance 5
Materials & Stores 7
Human Resource 2
Competitors Analysis Composition Of Market Share For Transformers –In Terms Of Sales Value Cgl And Others
Companies
MARKET CAPACITY OF TRANSFORMER MANUFACTURER IN INDIA A major part of the transformer manufacturing capacity of India is contributed by the major players like 1-BHEL 2-CGL 3-ABB 4-AREVA
Crompton Greaves
Ltd. 21
30000 MVA p.a.
Are
va
Tel
k
Kan
oh
ar
Cro
mp
ton
Kir
losk
ar
BH
EL
Vo
ltam
p
EM
CO
Bh
arat
AB
B
Oth
ers
BHEL
ABB
Areva
EMCO
Bharat Bijlee
Voltamp
Telk
25000 MVA p.a.
17000 MVA p.a.
15000 MVA p.a.
12000 MVA p.a.
7000 MVA p.a.
5000 MVA p.a.
3000 MVA p.a.
25%
20%
Whereas the total transformer manufacturing capacity of India in MVA is
approx. 200000 MVA p.a. CGL is one of the highest MVA producer in India. MARKET SHARE OF TRANSFORMERS SALES
45%
40%
35%
30% Power Transformer
Distribution Transformer
15%
10%
5%
0%
The above are the market share captured by some major transformer
manufacturers.
PRICE COMPETITIVENESS OF COMPANIES 22
BHEL 19%
CGL 22%
ABB 21%
Areva 21%
EMCO 17%
Crompton BHEL ABB Areva EMCO
PRICE COMPETITIVENESS OF COMPANIES
25%
20%
15%
Series1
10%
5%
0%
Greaves
Ltd.
The company who can offer best quality at affordable prices often turns out to
be a winner. It has been observed that 22% respondents have rated CGL for
offering best quality at affordable prices; followed by AREVA & ABB at 21%,
then BHEL at 19% and at the end EMCO 17% respectively (In % AGES)
Company
23
2001-02
Company 2005-06
CGL 19.2
BHEL 12.7
VIJAI 20.0
OTHERS 46.2
TOTAL 100.0
CGL 27.0
BHEL 18.9
VIJAI 12.8
Others 41.3
TOTAL 100.0
24
Company 2007-08
CGL 18.3
BHEL 12.0
VIJAI 15.3
OTHERS 54.4
TOTAL 100.0
Crompton Greaves working in front of other companies
Market Share - A major part of the installed transformer capacity of India is
contributed by the transformers supplied by CGL i.e. every 7 th transformer in
the country is a CGL make transformer. High market share is due to
customer’s confidence in our reliable products and services. However many international players entered in the Indian market like ABB, Siemens, Areva
and many more to come, CGL is ready to face & counter future competition by
continuous up gradation in its technology & services. In spite of such stiff
competition, CGL has maintained increasing order book position and has increasing turn over values. Purchase Methodology - All the customers prefer to purchase through tender as indicated by over 100% of the respondents. Funding Procedure - Majority of the customers are funding the projects from the domestic funding or own funds i.e. 35%; next way preferred is through
World bank/ADB i.e. 28%; others are financial instituti ons which is 24% and ECB 13%. 25
Response time- The responses received takes 3 to 6 months as the products being purchased are generally costly and through tenders however sometimes,
responses received takes more than 06 months. Buyer selection process - The suppliers were selected on the basis of tender
and order being given to the lowest or the chosen one, ho provide best quality in cheaper prices. Buying Frequency - The buying frequency indicates that there is no set pattern followed by the SEBs / Utilities / Industries in the pre-reform era
and the equipments were procured as and when required. Competition- The results indicate a mix response with likely increase in
competition. Rating of various attributes of products- The results in the chart clearly marks that customer wants the best quality at best prices. The quality and
price are the front-runners at 24% and 23% respectively followed by ‘After Sales Service’ and the delivery. The customers are not interested in the brand
image in the industrial purchases. Rating of the companies in terms of quality- Customers perceived quality as
the most important criteria. The respondents have rated the product-
performance of major equipment suppliers. It has been observed that 22%
respondents have rated CGL with the best quality of products. It is closely foll owed by BHEL at 21 %, AB B at 20% & A reva a t 19%.Quali ty of EMCO has not been up to the mark. Ranking of the companies on the basis of price- The Company who can offer
best quality at affordable prices often turns out to be a winner.
It has been observed that 22% respondents have rated BHEL for offering
products at high prices; followed by CGL at 21% ,then ABB at 20% and at the
end Areva and EMCO at 19% & 17% respectively .
26
SEB’s 38%
Utilities 42%
Industries 20%
Power Transformers 60%
Distribution
Transformers
40%
27
CUSTOMER SEGMENT
SEBs
Utilities
Industries
CGL caters to the customers in various segments. 38% of the supplies are to
the State Electricity Board’s (SEB), followed by 42% to various Utilizes like
NTPC Ltd., PGCIL, etc. It caters to Industries by 20% of its supply.
PRODUCT MIX
Quality 24%
Price 23%
Delivery 18%
After Sales
Service
20%
Brand Image 15%
28
Power Transformer
Distribution Transformer
CUSTOMER CRITERION FOR VENDOR SELECTION
BHEL 21%
CGL 21%
ABB 20%
Areva 20%
EMCO 18%
29
The results in the chart clearly marks that customer wants the best quality at
best prices. The quality and price are the front-runners at 24% and 23%
respectively followed by After Sales Service and the delivery. The customers
are not interested in the brand image in the industrial purchases.
PRODUCT QUALITY RATINGS OF COMPANY
The Marketing Department at CG Malanpur Division operates in basically two modes:
Tendering
Customers
Order Received (Letter of
Intent)
Specification
Design
Bill of
Material
Since CG Malanpur division is a Job-Type production unit, the division takes order from the customers which vary according to the customer requirements. The Marketing Department takes following steps: 30
Quotation
Marketing
Description of Various Departments Marketing Marketing
Tendering Execution
o o o o o o o o o
Enquiry received from regions
Preparation of design
Costing Preparation
Guaranteed Technical Particular or GTP Sheet Preparation ( This document contains
information about the various sub-components and variation in costing depending upon what is used)
Techno-Commercial Deviations
Formal Offer Submission
Order Finalization
Order Received
Contract Review
Execution
Once the order is finalized by the customer, the marketing department begins the planning
phase of the order. Each order takes about 21 days to get its basic designing done and this
duration is divided according to the various steps involved in the complete production process.
The marketing department keeps the customer informed about the progress of his order and coordinates the internal activities so as to get the order completed within the allocated
duration. If the customer makes some post order changes, the designing team interacts with the customers about the concerned details and whatever technical and monetary changes should be made in the contract. 31
SAP
-3
32
It releases orders to the shop floor/vendor. Reschedules due dates of existing open orders. Analyze and update system planning factors like lot size, lead time, safety stock, scrap allowances. Cushion Stock- i) providing physically a safety stock
ii) Providing cushion lead time It reconciles errors in inconsistencies and tries to eliminate root causes of these errors.
Purchase Order Bill of
Materials
Terms of
Payment
Materials Price and
Negotiations Vendors
103 Movement (Stock-in,
No Accounting Entry) Material Received
105 Movement (Unload &
Quality Assurance)
Stores
In-Time Issuing
It performs following major functions:
Discounts Storage &
Security
It identifies the key problem areas that require immediate action. It tries to solve critical material shortage problems so that corrective action can be taken which must act as an information for the next period-
i)
ii)
iii)
Accuracy of information is most important for MRP system to act.
The 2nd important issue is the precaution one has to take in order launching (to shop floor). This has to be correctly entered.
Before releasing an order, it ensures that the components are physically
available, so periodic checking of actual inventory status and the one available in the system is necessary.
In case of a discrepancy, then few people can be deployed in checking inventory from time to time
physically in the shop floor. Any correction may be entered in the system and the process continues till the discrepancy disappears.
Other than the functions mentioned above the materials department also supervise the materials quality, for this two major functions are performed:
103 Movement:
The 103 Movement is performed when the stock is received at the company gates, the material is checked against the list of the materials ordered however no entry accounting is done at this moment, the acknowledgment of the reception of the materials is done but its validity is not communicated.
105 Movement:
The materials are then unloaded from the truck into the stores and the quality assurance department checks whether the materials received are of appropriate quality. During the 105 movement, the 33
34
materials department safely stores the materials received in the Stores with appropriate utilization of
the space available.
The materials kept in the Stores are issued to the Production Department in time according to the plans
made by the Planning Department.
Inventory management
Transformers are not an off-the-shelf product, and are customized to meet individual customer
requirements and order specifications. Each transformer is identified by assigning a job number (JN),
each having a separate bill of material. Hence, they have two types of raw material inventory: -
1. Raw materials which are procured against specific JN:
JN wise items are procured on the basis of monthly requirements. Depending on the process cycle,
inventory for high-value items is optimized. The required levels of raw material are maintained in the
inventory. Raw materials such as copper rods and CRGO sheets are procured based on specific JN's. By
using technical production management tools like ERP System and CPM, they estimate our job-specific
requirements for raw materials like copper rods and CRGO sheets. On receiving copper rods, the same
are sent for job work to convert it into the requisite size of conductors as per the customer
specifications. The process of converting the copper rods into conductors is normally completed in
fifteen days. Received materials are issued to the shop floor on the basis of requisitions generated by
the shop floor team.
2. Raw materials which are common to all types of transformers:
The requirement for these items are estimated based upon past consumption data, future
requirements, lead time, ABC analysis, and market sensitivity, minimum stock levels and reorder levels.
The company keeps its raw material purchase policy flexible enough to absorb seasonal factors as well
as unforeseen ups and down in the raw material requirement.
Periodically, a report is developed on non-moving items and appropriate decisions are taken in time to
dispose off the same.
35
The Materials Department of the company plans the material requirement during one complete operating cycle and integrates it with its strategic plans.
Production - Design, Manufacturing and Testing Equipment They use state-of-the-art technologies in their in-house design department, and strive to upgrade the
products based on customer feedbacks and engineering expertise of their technical teams. Apart from continuous improvement, every effort are being carried out to reduce the input cost by increasing
efficiency in manufacturing cycle, reduction of cycle time, reduction of raw material cost and procuring improved products/machines from third-party vendors and so on. Few accomplishments achieved are:
Introduction of CTC conductors have decreased cycle time for windings. Installation of the new oven in 2007 utilizing the "autoclave with Vapor Phase Drying process" which has helped to reduce cycle time of the process of drying active parts from approximately nine days to three days.
Acceptance
NO
Specification
Technical Design GTP (Guarantee
Technical Particular)
YES
Customer
Details
Letter of
Intend
Letter of
Acceptance
Order
Technical
Specification
of Customer
Planning
Design Department Bill of
Material Purchase
36
CGL uses state-of-the-art technologies in their in-house design department, and they strive to upgrade
their products based on customer feedbacks and engineering expertise of their technical teams. The
electrical designs are made using Excel software’s and mechanical drawings are made using the
software’s AutoCAD, Inventor and ProE. Apart from continuous improvement, every effort are being
carried out to reduce the input cost by increasing efficiency in manufacturing cycle, reduction of cycle
time, reduction of raw material cost and procuring improved products/machines from third-party
vendors and so on.
Production Department
Production Process Diagram
37
I. Product Design and Planning
Since all transformers are tailor made, on receipt of the customer order, the manufacturer commence
designing the transformer as per customer needs. The drawing is then submitted to the customer for
approval. The drawing and bill of material are then issued to various departments to carry out further
work as per design.
II. Manufacturing process a) Core Building
CRGO (Cold Rolled Grain Oriented) steel sheets are used for manufacturing core laminations by the sub
contractors. They cut required size of laminations by high accuracy shears. Laminations are stacked in
step lap - interleaved fashion to minimize core losses, exciting current and noise level. The yokes and
limbs are firmly clamped between steel channels in manner, which reduces vibration, and inherent
noise.
b) Winding
Annealed/half-hard copper conductors either in the form of a strip or round wires are used in winding
operations and dimensions for the winding such as inside diameter and outside diameter are
maintained by selecting proper Mandrel. Insulation is provided as mentioned in the design output. The
coil tapping leads and phase leads are taken out according to the design output. Coils are kept under
clamping pressure and sent for ovening.
c) Preparation of insulating material
Precompressed boards, perma wood (un-impregnated identified laminated wood which can withstand
temperatures of upto 1100c); craft paper, crepe paper, etc. are used as insulating material. Components
such as cylinders, wedges, spacers, rings etc. are made from these materials by different operations like
cutting, edge rounding, chamfering, drilling, machining etc.
d) Core Coil Assembly
The coils are concentrically assembled on the core limbs as per the design details. The core and coil
assembly is rigidly supported and clamped. The main leads and tapping leads of coils are then connected
to bushings and the tap changers respectively. All these leads are properly clamped and insulated to
ensure required electrical clearance and creepage.
A tap changer is a selector switch that allows the voltage ratio of the transformer to be changed by
increasing or decreasing the turns of the winding. The tapping leads of the coils are connected to the tap
changer to allow the additional turns to be brought into or taken out of circuit. In some distribution
38
transformers, the tap changer switch is an off load manual switch, while in others, the tap changer is an
on-load automatic switch.
e) Tank finish and paintings
After welding, tanks are pre treated by shot blasting. They are thoroughly cleaned before applying a coat
of zinc chromate primer paint on external surface. One coat of weather resisting enamel finish paints is
then applied on outside surface of the tank. To all interior surfaces a coat of heat and oil resistant paints
is applied. The final coat of external paint is applied, prior to dispatch of ready transformer, fitted with
accessories and fittings.
f) Ovening
Hot air drying is carried out to remove moisture from the active parts of the transformers. For
transformers up to 33 kV class drying is carried out in well ventilated ovens for a period till insulation
resistance builds up to specified value. For larger transformers, above 33 kV class, drying takes place in
vacuum drying oven. The core - coil assembly is initially heated for a predetermined period by admitting
heated kerosene vapour, and then they are placed under vacuum. This cycle is repeated till all the
moisture is extracted.
g) Tanking
Active parts (Core-coil assembly) after drying are placed in the tank. Bushings of specified rating are
mounted on the top or side as per design and connected to end terminals. Tap changing switch is
provided and connected to various tapping leads as per design. The top plate is tightened at specified
torque and the filtered oil is filled under vacuum. The tank is tested for leakage by subjecting it to the
required pressure after all other accessories are fitted on the tank. The oil is used for further insulating
purposes plus the removal of heat from the windings. The assembly of the windings on the core allows
gaps to enhance the oil circulation around the windings. The tank is constructed with fins or tubes to
allow better circulation of the oil and to provide a greater surface area for contact with the cooling air.
Very large transformers have banks of fans to provide greater air-cooling and are operated in
conjunction with temperature sensors. Some transformers also have forced oil circulation using a
pumping system and an oil cooling circuit. In installations where the use of transformer oil needs to be
avoided, the cooling medium used can be gas (nitrogen is often used).
III. Testing:
We have state-of the art testing facilities including a fully equipped testing room for carrying out of all
routine tests such as temperature rise test, zero phase sequence test etc. Every transformer is tested for
routine tests specified in the standard specification on the completion of which a test certificate to this
effect is issued.
All transformers are tested in our sophisticated laboratory for the following routine tests conforming to
National and International Specifications on the completion of which a test certificate to this effect is
issued.
Voltage Ratio.
Winding resistance.
Impedance Voltage.
No load and Load Losses.
No load Current.
Dielectric tests.
Paid Branch Office
Factory
Pass
Collection of
Payment After the acceptance of the order from the customer, the company starts the assembling of the
transformer according to the technical specification of the customers; after the assembling and testing is
completed the finance department issues an invoice and performs 3 major functions:
39
CG - Transformer designs are proven for dead short circuits by tests conducted at the independent,
accredited short circuit laboratory of the Government of India.
Finance Invoice Commercial Invoice Central Excise Duty
Customer
40
Payment of Central Excise
Duty: The finance department makes sure that the central excise duty on the products is paid to
the competent authorities, only when the duty fees is paid the product is allowed to pass from
the factory gate.
Commercial Invoice: The
finance department also issues a Commercial Invoice a copy of it sent to the branch office and
the other copy is sent to the customer. The payment from the customer is received on the basis
of the terms of payment and other details mentioned in the invoice.
Six Sigma
The company focuses upon improving the quality of its products hence it appointed an external
consultancy company SIX SIGMA Consultant Inc. to eliminate the defects in its projects. The Six Sigma started in 2002 in CGL and was instated in Malanpur Divison in 2002. The employees in this department
are designated as Black Belts (for people who are higher in hierarchy) and Green Belts for the people who are lower in hierarchy at the divisional level. The department is the company is supervised by the
MD himself. The problems in the production process are handled in the forms of projects and the
department has to think out-of-the-box to find solution to the problems. The following methodology is used to remove defects:
DMAIC Methodology
Define the problems
The department forms cross-functional teams to identify the problems. These teams use the Process Map to identify the key problematic areas. The problems are defined as:
Y=f(x)
Where X are the various factors which are responsible for the problem Y and these “Xs” may be in thousands.
A tool knows as CED (Cause-Effect Diagram) or Fishbone Diagram is used to define Xs.
Fishbone Diagram
Environment
Measurement
Method
Material
Man
Machine
DEFECT
The various Xs are defined from the fields listed above in the diagram.
Measure and Analysis
To measure the impact of the various Xs FMEA tool (Failure Mode & Effect Analysis) is used. This tool uses 3 parameters to determine the ratings:
o o o
Severity of Y
Frequency or Occurrence of X
Detection of X (As the detection of X increases its rating decreases)
On the basis of these parameters the RPN ( Risk Priority Number) of various problems is determined. The various Xs listed are categorically divided with the help of benchmark line
according to the reducing affect of the X on the problem Y. The scrutinized Xs are subjected to various statistical tools to obtain the major Xs in order to find the real-life solutions to the problems.
Improve & Control
The factors obtained are the major areas which can be improved and controlled to achieve the better quality products.
The company implements ‘six sigma’ in every aspect of its functioning to offer best services and quality
to its customers. For eg: The Green Belt supervises the IPQ (In-house Process Quality) in its divisions.
Other than this the Suppliers are rated according to SQP (Supplier Quality Process) in which various Clauses are defined which need to be satisfied by the supplier only then it can be a supplier to the divison. 41
42
The CTQ (critical to quality) raw materials are supplied only by the suppliers who are able to clear the
75% cut-off in the listed clauses while this is 65% for the non-CTQ raw material suppliers.
On an average a project takes about 3 months for completion and the half the time i.e. 1.5 months is
spent in identifying the problems
Human Resource
The HR Department mainly performs the following functions:
Administrative & Statutory Compliances: These are the normal day to day activities which the HR Department has to perform in the company. They see to the regulatory organizational duties concerning the employees and the rules and regulations defined in the Factory Act. Recruitment & Planning: The HR department forecasts the manpower needs of the company on the basis of the sales plan defined in the yearly budget plan. In order to fulfill the division’s
manpower requirements the HR Department performs the functions of recruitment and training, the recruitment procedure consists of following basic steps: Questionnaire & Interview Salary & Wages: The salary and wages are basically divided as per the classification of the
employees, they are basically categorized into 3 groups:
o
o
Trainees: The trainees are recruited from the following sources:
ITI (Electrical)
These trainees are basically appointed for duration of 2 years with a stipend of Rs. 2500 and are also provided with hostel facility and Mess Facility. The trainees are also
provided with 7 Casual Leaves(CL) and 7 Sick Leaves(SL) as per the Apprentice Act.
After the duration of the 1st year these trainees may be observed as CGL Trainee whereby they are provided with some extra facilities.
Workmen (Blue Collar)
If a trainee is observed to perform well in this duration of 2 years, he may be appointed
as a CGL employee (workmen) and now he receives wages on daily basis. Also, the
workmen are appraised using BARS and are graded on a scale of 1to 4 (T-1 to T-4). The
first promotion is awarded on the performance of 1st year and then on a basis of 5 years.
The employees are now availed with 7CL and 9SL, also the employees are provided with 18 Privileged Leaves which can be availed only after duration of 240 days as a workman.
43
The workmen are also given Compensatory Leaves which are subject to the number of extra shift work.
Corporate Recruited (B.E./B.Tech./ MBA)
The Corporate Trainees are awarded with a stipend of Rs. 7000 with 7CL and 7SL for 1 year and when observed as a CGL Trainee a stipend of Rs. 9000.
o Executives (White Collar)
The white collar jobs are categorized into 3 categories:
1) Executives(E-1 to E-3)
2) Manager(M-1 to M-3)
3) Leader(L-1 to L-3)
These white collar jobs have 10CL, 15SL and 30PL associated with them (PL can be
availed only after a duration of 240 days). The white collar jobs are graded on a scale of 1 to 3.
The Salaries are given on attendance basis and a computing software is used for the same.
Information Technology
The company uses SAP3 as its ERP system for integrating various departments of the company. The
company’s various departments float the data on the ERP system and the access to the information is
provided to the employees on the basis of their departments and their posts. Various levels of access to
the information are defined in the ERP system and the ERP system is operated through the servers at
the Bombay center.
44
Some questions asked to the marketing manager
QUESTIONNAIRE
1.
Sector to which your organization belongs
Government
Semi government
Industrial sector
Private
2-What is your line of activity in electrical industry
45
Always Mostly Very
often
Someti
mes
Neve
r
Tender
notification
through
press
Involved
consultants
Any other
please
specify
Transmission Distribution
Generation
IPP
Any others (please specify)
2. Type of electrical equipment usually required/dealt by you
Power Transformers Distribution Transformers
3. How do you route your purchases?
4. How do you finance your purchases? 46
Always Mostly Very
often
Sometim
es
Never
External
commercial
borrowings
World
bank/ADB/OE
C funded
Owned
finances
Financial
institution in
India
Like IDBI, PFC
etc
Any other
please
specify
Alway
s
Mostly Very
often
Sometime
s
Never
Allow for
release
advance
Payment
Pro-rata
release as
per supply
47
5. Your standard terms of payment
Always Mostly Very
often
Someti
mes
Never
Tenders,
Selection on
basis of
prices
Tenders,
selection
after
negotiation
Negotiation
with the
short listed
manufacture
rs
Distributive
buying from
more than
one party
Any other
please
Through
letter of
credit
Through
banks/financ
ial
institution
(IDBI etc)
Any other
please
specify
48
6. What is your buyer selection procedure?
49
Annually As and when required
Once in 2 years
Any other please specify
8. What is your vendor selection procedure?
9.
As per pre-qualification Past experience of supplies given to you
Reference list of the vendor
Brand image
Competition level after reforms in the distribution sector
No change
Increased competition from global players
Emergence of new image of existing players in this field
10. Companies with which you have executed business
Crompton greaves ltd (CGL) Bharat Heavy Electricals ltd (BHEL)
ABB
Areva EMCO
VOLTAMP
Kirloskar
Any other please specify
specify 7. What is your buying pattern?
1 2 3 4 5
Quality
Price
Delivery
After sales
service
Brand image
1 2 3 4 5
CGL
BHEL
ABB
AREVA
EMCO
1 2 3 4 5
CGL
BHEL
ABB
AREVA
EMCO
50
11. Your rating various attributes of products
12. Your rating of the following companies in terms of quality
13. Your rating in terms of pricing the product
Outstandin
g or
expensive
Very good Good Average Poor Very
poor
or
chea
p
Promptness
14. What had been the response time of the suppliers dealt by you?
Immediate Within a fortnight
Within a month
After a month
15. Total demand expected in the distribution & power transformer business in the next five years.
1000crs 2000crs
3000crs
4000crs
5000 Crs
6000 crs
16. Technology
CGL’s CGL’s CGL’s CGL’s CGL’s CGL’s
technology technology technology technology technology technology
is is is is is is
outstanding very good good average poor very poor
17. Service after sales: How will you rank the following
51
of response
Problem
repairs
Technical
competence
Promptness
of response
Timely
delivery
18. How will you rank CGL for its range of transformers
Wide range
19. Contribution of CGL in National economy
High
Moderate Low 20. Customer retention
Major strength
Minor strength
52
Inadequate
Neutral Major weakness Minor weakness
21. How will you rank CGL for providing the complete and accurate
invoices?
Complete and Incomplete
and
Accurate Inaccurate
CONCLUSION I w as given t he opportunity t o do my summe r i nterns hi p& project in the CGL, which is the largest transformer manufacturing enterprise.
53
54
To conclude this project report, I can say that the company holds a good
market share and is managing well, even when there is a big competition
market in front of CGL.
The study proves that the com pany has e ntered i nto the technical
collaboration with many i nternational firms through acquisitions. Where
the competition, is increasing day by day like this Crompton Greaves is
changing its working style in performance and providing after sales
services to the customers.
BIBLIOGRAPHY
INTERNET
www.powermin.nic.in
www.google.com , www.cea.nic.in
55
Top Related