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Organisational Study Report

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Organisational Study Report

  1. 1. A REPORT ON ORGANIZATION STUDY AT MADRAS ENGINEERING INDUSTRIES PVT LTD. CHENNAI ABRAHAM JOSEPH (Reg. No:85211001) Under the Guidance of Dr. Mohammed Aslam Associate Professor SCHOOL OF MANAGEMENT STUDIES CUSAT Submitted in partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATION to the Cochin University of Science and technology School Of Management Studies COCHIN UNIVERSITY OF SCIENCE AND TECHNOLOGY Kochi-682022, Kerala, India 2011-2013 1ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  2. 2. DECLARATION I do hereby declare that this report is a bonafide record of theorganization study done by me under the supervision of Dr. MohammedAslam. , School of Management Studies and Nilanjan Chakraborty, DY.General Manager (Marketing), Madras Engineering Industries Pvt Ltd, MCity,during the academic year 2011-2012, in partial fulfillment of the requirementsfor the award of the Degree of Masters Programme in Business Administrationof School of Management Studies, Cochin University of Science andTechnology, Kochi. This work has not been under taken or submitted elsewhere inconnection with any other academic course.Place: SignatureDate: ABRAHAMJOSEPH 2ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  3. 3. ACKNOWLEDGEMENTI wish to take this opportunity to express my sincere expression of gratitude toeach and everyone who helped me in the completion of this work.First of all I thank God almighty for giving me all the grace and assistancethroughout my work.I am very glad to express my gratitude to Dr. P. R. Wilson, Director, School ofManagement Studies, CUSAT for his timely help all through my study.I would like to extend my gratitude to Dr. Mohammed Aslam, AssociateProfessor, School of Management Studies, CUSAT, for his valuablesuggestions, advice and encouragement throughout the course of this work.I owe my gratitude to Nilanjan Chakaraboty, Deputy General Manager(Marketing), Madras Engineering Industries Private Limited, MCity, for hisconstructive criticism and constant encouragement during the course of mystudyI express my deep gratitude to my dear friends for their co-operation andhelping hands, who were always friends in need. Abraham Joseph 3ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  6. 6. 1.1. INTRODUCTIONAn organization is a social arrangement which pursues collective goals, which controls itsown performance, and which has a boundary separating it from its environment.Organization is the association formed by a group of people who see that there are benefitsavailable from working together towards some common goal.Organization studies are the study of individual and group dynamics in an organizationalsetting, as well as the nature of organizations themselves. Whenever people interact inorganizations, many factors come in to play. Organizational studies attempt to understandand model these factors. Organizational study is essential to any MBA graduate as it helpsthem to connect theory with practice.Organization study refers to the study of organization as a whole and getting adequateknowledge with various departments in the organization. The study was carried out atMadras Engineering Industries, Chennai. This study is based on the different aspects anddimensions of different departments of the company The study was carried out at the MadrasEngineering Industries, situated at Mahindra city, Chennai.1.2. SCOPE OF THE STUDYThe organization study at Madras Engineering Industries aims at getting accustomed to thebusiness environment of MEIL for a period of one month. The study will be conducted tounderstand the structure, function and process of various departments and theirinterdependence.1.3. OBJECTIVE OF THE STUDYThe organization study was carried out in Madras Engineering Industries, situated at ChennaiMahindra city, is to achieve the following specific objectives: 1.3.1 To familiarize with the organization structure and its functioning 6ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  7. 7. 1.3.2 To familiarize with the different departments in the organization and their functions and activities including documentation. 1.3.3 To understand how the key business processes are carried out in an organization. 1.3.4 To understand how information is used in organization for decision making at various levels including data flow diagram. 1.3.5 To understand the extent of technology adoption including ICT, in the organization for various functions/activities. 1.3.6 To understand the growth and diversification strategies, portfolio Structure of the Organization 1.3.7 To study the Overall performance of the organization 1.3.8 To understand the performance measurements of employees and various employee welfare activities, Training activities 1.3.9 To understand the steps taken to increase the productivity in the organization1.3.10 To conduct a SWOT analysis of the organization1.4. REASON FOR SELECTING THE COMPANYThe reason for selecting the Madras Engineering Industries PVT LTD is that, they are thelargest supplier of automotive slack adjuster to other industries. The industry contains all themajor areas of study.1.5. METHODOLOGY The success of a research depends largely on the methodology used. The appropriate methodology will improve the validity of the findings. The following methodologies were adopted for the study. 7ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  8. 8. 1.5.1 Identification of the company Madras Engineering Industries, Chennai was selected for the organization study, considering various factors including reputation of the firm, ease of getting permissions, industry, location etc. 1.5.2 Identification of the Objectives The specific objectives of the organization study was identified and listed out in order of priority. This helped in conducting the organization study in a systematic and effective manner. 1.5.3 Data collection Both primary sources and secondary sources were used in this particular research. Primary Data Primary data were collected through observation, personal interview, discussion with managers and employees of the various departments of the organization. Secondary Data Secondary data were collected through literature review which includes company’s internal records, publications, annual reports, journal, statutory report, website (official and others) etc. 1.5.4 Analysis and Interpretation The data collected must be properly analyzed to evaluate and enhance the data quality. The analysis is done to identify the actual meaning of the data which helps in 8ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  9. 9. proper interpretation. Data analysis involves working to uncover patterns and trends in data sets and data interpretation involves explaining those patter ns and trends. 1.5.5 Documentation After the analysis and interpretation of collected data, the information is documented in the form of organization study report, which gives an elaborate report on the organization study.1.6. LIMITATION OF THE STUDYThere were some limitations in conducting the organization study at Madras EngineeringIndustries Pvt Ltd. 1.6.1. There were difficulties in obtaining data from executives and managers due to their busy work schedule. 1.6.2. An in-depth study of the company could not be carried out due to shortage of time. 1.6.3. The reliability of data used for study is largely depends upon the companies reports and the information given by executives. 1.6.4. The company has the limitation to disclose their financial details, so a detailed analysis of financial performance of the company is not possible. 9ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  11. 11. 2.1 INDUSTRY PROFILE“To emerge as the destination of choice in the world for design and manufacture ofautomobiles and auto components with output reaching a level of $145 billion, accountingfor more than 10 per cent of the GDP and providing additional employment to 25 millionpeople by 2016”– Automotive Mission Plan, India, 2006-2016The Indian auto component industry has been navigating through a period of rapid changeswith great élan. Driven by global competition and the recent shift in focus of globalautomobile manufacturers, business rules are changing and liberalisation has had sweepingramifications for the industry. The global auto components industry is estimated at US$1.2trillion. The Indian auto component sector has been growing at 20% per annum since 2000and is projected to maintain the high‐growth phase of 15‐20% till 2015.The Indian auto component industry is one of the few sectors in the economy that has adistinct global competitive advantage in terms of cost and quality. The value in sourcing autocomponents from India includes low labour cost, raw material availability, technicallyskilled manpower and quality assurance. An average cost reduction of nearly 25‐30% hasattracted several global automobile manufacturers to set base since 1991. India’s process 11ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  12. 12. engineering skills, applied to re‐designing of production processes, have enabled reduction inmanufacturing costs of components. Today, India has become the outsourcing hub forseveral global automobile manufacturers.Innovation and cost pruning hold the key to meeting the global challenge of rising demandfrom developed countries and competition from other emerging economies. Several largeIndian auto component manufacturers are already gearing to this new reality and are in theprocess of substantially investing in capacity expansion, establishing partnerships in Indiaand abroad, acquiring companies overseas and setting up greenfield ventures, R&D facilitiesand design capabilities.Some leading manufacturers of auto components in India include Motor Industries Companyof India, Bharat Forge, Sundaram Fasteners, Wheels India, Amtek Auto, Motherson Sumi,Rico Auto and Subros. The India’s Top 500 Companies, published by Dun & Bradstreet in2006, listed 22 auto component manufacturers as top companies in India with a totalturnover of US$ 3 bn. These companies are in the process of making a mark on the globalarena, and some have already acquired assets abroad.2.2. INDUSTRY STRUCTUREThe total turnover of the Indian auto component industry is estimated at US$9 bn in 2006.The industry has the resources to manufacture the entire range of auto products required forvehicle manufacturing, approximately 20,000 components. The entry of globalmanufacturers into India during the 1990s enabled induction of new technologies, newproducts, improved quality and better efficiencies in operations. This in turn effectivelyacted as a catalyst to the local development of the component industry.The Indian auto component industry is extensive and highly fragmented. Estimates by theDepartment of Heavy Industries, Government of India, indicate there are over 400 largefirms who are part of the organised sector and cater largely to the Original Equipment 12ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  13. 13. Manufacturers (OEMs). Another 10,000 firms exist in the unorganised sector that operates ina tier‐format. The firms in this segment operate in low technology products and cater to TierI and Tier II suppliers and also serve the replacement marketAround 4% of the companies operating in the auto component segment cater to 80% of thedemand emanating from OEMs. Within the unorganised segment, apart from supplying inthe aftermarket, a number of players are also involved in job work and contractmanufacturing.The range of products manufactured, with each broad product segment having a differentmarket structure and technology, has negated any possible concentration of the market in afew hands. The market is so large and diverse that a large number of players can be absorbedto accommodate buyer needs. However, there are a select few large companies that haveintegrated their operations across the value chain. The key to competing in this industry isthrough specialisation by product‐type, and integrating operations across the related area ofspecialisation.An interesting insight provided by a study conducted by the National Council of AppliedEconomic Research revealed that the market segments for auto components included OEMsconstituting 33%, local components having 25% with the balance 42% comprising ofspurious market including re‐conditioned parts. A large part of the spurious or grey marketcompanies are in the unorganised sector. 13ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  14. 14. The regional base of auto component manufacturers is mostly concentrated in the West,North and South of India.This regional concentration of auto component manufacturers hasbeen dictated by the emergence of automobile manufacturers in these regions. The set up ofTata Motors, Bajaj, Mahindra & Mahindra and TVS in the 1950s and 1960s laid thefoundation for auto component manufacturers in the West and South, whilst the entry ofMaruti during the 1980s created the base in the North.2.3 INDUSTRY GROWTHProduction of auto ancillaries was estimated at US$10 bn in 2005‐06 and has been growingat a robust 20% per annum since 2000. Exports of auto components have been stronggrowing at 24% per annum since 2000. This growth in exports if sustained for another fiveyears will see India’s auto components exports will touch US$ 5 bn by 2011 from the US$ 2bn at present.Till the 1990s, the auto component industry was solely dependent on the domesticautomobile industry to drive the demand for ancillary products. This composition of themarket however is undergoing radical changes with global outsourcing gaining momentum.In recent times, exports has emerged as a significant driver of growth, and the demandemanating from global OEMs and Tier I manufacturers has opened new opportunities for theauto component industry in India. At the same time, a bright outlook for the domesticautomobile industry also offers significant growth potential, given the fast rising incomelevels with a rapidly growing middle and high income consumers.Share of exports in total production has risen from 10% in 1997 to 18% in 2006. Thecomposition of exports in terms of the proportion of OEM and aftermarket has alsoundergone a sweeping change since the past decade. The ratio of OEM to aftermarket haschanged from 35:65 in the 1990s to 75:25 in 2006. While exports have been booming, therehas been a sharp rise in imports of auto components as well, especially in the last three years.From an import of US$ 250 mn in FY03, they have gone up to US$750 mn in FY06. This isa healthy trend, indicative of rising domestic demand. 14ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  15. 15. 2.4 AUTO VISIONThe automotive space has always been considered special in any economy because of thenumber of growth impulses that it provides to the economy in general. Given the criticalityof this, the governments department of heavy industries prepared a 10-year vision plan wayback in 2006, which set, amongst others, a target of: 1. Increasing turnover to $122 billion to $159 billion by 2016. 2. Increasing export revenues to $35 billion by 2016 3. Providing employment to additional 25 million people by 2016 4. Empowering the automotive sector to contribute 10 per cent of the countrys GDP by 2016.2.5 FUTURE 15ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  16. 16. Slowdown in automobile sales has dented growth of the auto-mobile parts industry in India.Data from Central Statistical Organisation show growth in output of automobile ancillariesslowed down sharply to 14.9% in April-November 2011, on a year-on-year basis, from32.3% growth in the previous year.Automobile sales had registered robust growth in 2009-10 (April-March) after the financialcrisis of 2008. The buoyancy continued in FY11 as well. It is only in the current financialyear that some segments of the industry — mainly passenger vehicles and heavy commercialvehicles — are feeling the pinch again.Data from Automotive Component Manufacturers of India show turnover of the automobileparts industry grew 27.4% to `1,81,842 crore in FY11. The industry’s market size is ex-pected to grow by a slower 11.8% in FY12. Weak demand from domestic industry and slowgrowth in exports are likely to ham-per growth in market size. Exports account for 13-14%of the industry turnover.Demand from Europe, which is one of the largest markets for Indian auto components(accounting for more than 25% of total exports), is likely to be slow in the second half ofFY12.Depreciation of the Indian rupee is expected to partially negate impact of slower exportnumbers. Also, replacement demand for components is likely to be high given the surge innumber of vehicles sold in the past few years.. 16ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  17. 17. CHAPTER -3 COMPANY PROFILE3.1 GENERAL INFORMATIONMadras Engineering Industries Private Limited (MEI) is a Tier I supplier for the OEMs inthe Medium and Heavy Commercial Vehicle sector. MEIL has been in the auto ancillaryindustry, for about four decades. The company was founded in Chennai, India in 1966 by 17ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  18. 18. Mr. E.K. Parthasarathy, current Chairman and Managing Director, to manufacture variousmachined components for automotive industry.MEIL has pioneered the indigenous development of Self Setting Automatic Slack Adjusterfor the global market. It has also developed Clutch Booster, Spring Brake Actuator, BrakeChamber and Wear Sensor, the commercial production of some of these items has alreadycommenced. MEIL plants have the total capacity to produce two million Automatic slackadjusters and 1 million Self setting automatic slack adjusters.MEI established as a leading global player in commercial vehicle braking systemcomponents with a significant presence in National and International OEM and replacementmarkets. MEIL has an average monthly export of 40000 units.3.1.1 PLANTS:MEI Operates from three locations in Chennai, India and all the plants are accredited withTS 16949 : 2009, ISO 14001 : 2004 and ISO 9001:2008 by TUV Germany and the R&Dcentre is located at IITM Res Park approved by Govt. Of India.Plant ILocated in Ambattur, ChennaiStarted operations in 196614,000 sqft facility located on ½ acre plotISO / TS 16949 : 2009 certifiedISO 14001 : 2004 certifiedInitial Annual Capacity of 12,00,000 manual slack adjustersPlant IILocated in Maraimalainagar, (25miles south of Chennai)Started operations in 1992 18ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  19. 19. 21,000 sqft facility located on ¾ acre plotISO / TS 16949 : 2009 certifiedISO 14001 : 2004 certifiedInitial Annual Capacity of 6,00,000 automatic slack adjustersPlant IIILocated in Mahindra City SEZ(30miles south of Chennai)Operations commenced in May 200740,000 sqft facility located on a 5 acre plotPhase II expansion will add another 20,000 sqft to this facilityInitial Annual Capacity of 6,00,000 automatic slack adjusters100% of production for exportsISO / TS 16949 : 2009 certifiedISO 14001 : 2004 certifiedISO 9001 : 2008 certifiedCapacity Expansion: MEI to more than triple its Automatic Slack Adjuster manufacturing capacity • Plant I o Annual capacity of 15,00,000 Automatic Slack Adjusters • Plant II o Annual capacity to 5,00,000 Manual Slack Adjusters • Plant III o Annual capacity of 6,00,000 Automatic Slack Adjusters 19ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  20. 20. Overall annual capacity available • 5,00,000 Manual Slack Adjusters • 21,00,000 Automatic Slack Adjusters3.1.2 MISSION AND VISIONVisionEstablish MEI as a leading global player in commercial vehicle braking systemcomponents with a significant presence in national and international OEM andreplacement markets.MissionMEI always focus on gaining a leading market share globally by achieving globalstandards in • Product Technology • Process Technology • Quality’3.1.3 MANAGEMENTManaged by a professional team of managers, having rich experience in the fields of Design,Development, Quality, Marketing and Manufacturing from the auto Industry3.1.4 MARKETINGMEI handles marketing of its Manual Slack Adjusters directly from its plant at Chennai forall domestic and overseas customers.MEI is marketing Automatic Slack Adjusters through John Bruce (UK) Ltd. for its overseascustomers. 20ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  21. 21. For the domestic market MEI Automatic Slack Adjusters and Self Setting Automatic SlackAdjusters (ASA – SASA) are marketed from its plants in Chennai – INDIA.3.1.5 MEI SALES AND SERVICE NETWORKMEI has a widespread spread dealer all over India to take care of the customer needs and uninterrupted supply of its products.A well qualified team of service staff located at all regime with proven experience providesservice to our customers3.1.6 OBJECTIVE OF THE COMPANYEvery organization works with specific objectives. Madras Engineering Industries Pvt Ltdworks with the following objectives • Design & Manufacture automotive components. • Contract Manufacturing for other auto component companies. • On time delivery with significantly reduced lead time • To ensure strict quality control and ISI standards of the product to compete in the global market • To maximize the cost reduction • Overall yield improvement by reducing process rejections.3.1.7 HISTORY1966: The company was founded in Chennai, India in 1966, to manufacture variousmachined components for automotive industry1982: MEI started manufacturing manual slack adjusters and parts for air brake systems forlight, medium and heavy commercial vehicles2000: MEI started exporting Automatic Slack adjusters to United Kingdom, Europe, theUnited States of America, Canada, the Middle East, Africa, Australia, New Zealand and 21ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  22. 22. Southeast Asia. Partnership with John Bruce UK Ltd. to market MEI manufacturedClearance-sensing Automatic Slack Adjusters.2007: MEI became the first Indian corporate to indigenously develope and patent self settingautomatic slack adjusters and commenced supplies to all the OEMs in India with a marketshare of over 70%.3.1.8 PHILOSOPHYMEIL is dedicated to continuous quality improvement and will make no compromise indelivering products conforming to customer specifications. MEIL products shall be secondto none in achieving global quality standards in their range of manufacture In keeping withthis policy, MEIL has put in place, rigorous quality control procedures to ensure the supplyof defect free products including inspection of incoming material, control over themanufacturing process, and finished product testing.3.2 ORGANIZATION STRUCTUREOrganizational structure hierarchy in the organization is given in the following chart: 22ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  23. 23. 3.2.1 BOARD OF DIRECTORSThe Board of the Directors of the organization is as follows. 23ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  24. 24. ▪ E. K. Parthasarathy : Chairman & Managing Director ▪ Priya Sriram : Director3.2.2 MANAGEMENTThe Management Team of MEIL is as follows. ▪ E. K. Parthasarathy : Chairman & Managing Director ▪ Sriram Sivaram : President ▪ K. Sundararajan : Vice President-Marketing ▪ V. Ravi Sharma : Senior General Manager - Operations ▪ A. Ramaswamy : General Manager - Finance ▪ C. Kathikeyan : General Manager - Human Resource ▪ Nilanjan Chakraborty : Deputy General Manager – Marketing3.3 COMPANY POLICIES 24ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  25. 25. 3.3.1 QUALITY POLICYMadras Engineering Industries Pvt Ltd is committed to prociding world class commercialvehicle air brake and clutch related products at competitive prices.While doing so, MEI will strive to continuously improve operating performance to enhancecustomer satisfaction.3.3.2 MAJOR ACHIEVEMENTS OF MEIL TOWARDS QUALITYCERTIFICATIONS • Madras Engineering Industries Pvt Limited is certified ISO 9001:2008 • MEIL is awarded ISO/TS 14001:2004. • MEIL is awarded ISO/TS 16949:2009. • Type Approval by TUV Germany • Type Approval by Link Laboratory, US3.3.3 SAFETY, HEALTH AND ENVIRONMENTAL POLICY The company is committed to maintain their organization remain environment friendlywhile achieving our business goals and contribute to sustainable development. The companyshall achieve this by: • Minimizing the consumption of natural resources through process improvement resulting in reducing reusing and recycling. • Preventing pollution through reduced consumption, improve processes and use of environmental friendly materials. • Continually improving the environmental performance. 25ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  26. 26. • Complying with all relevant environmental legislation and regulatory requirements. • Contributing to conservation of natural resources using renewable Sources of energy and water harvesting. • Contributing to social forestation in association with local governmental bodies. • Creating environmental awareness among through camps and projects with special emphasis on educational institution.3.3.4 LEAN MANUFACTURING & 6б • MEI has fully-embraced “Lean Manufacturing” & “6б” philosophy as the only means to become a global leader in our field • MEI participated in an industry cluster program through which all of the employees of the company have been trained in “Lean Manufacturing” • MEI has already implemented many “lean” principles and continues to improve its practices on an ongoing basis. • MEI invests in training its employees on a regular basis and has two certified 6 б Black-belts on staff 26ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  27. 27. 3.4 PRODUCTSThe company is largely producing slack adjusters. They produce high quality slack adjustersthat are used in the braking system of heavy vehicles. R & D department of MEIL helps inmaintaining high quality products and also come up with new diversified products.Production facility at MEIL manufactures three types of slack adjusters.Extensive Product line • Automatic Slack Adjusters • Self-setting Automatic Slack Adjusters • Manual Slack Adjusters • Clutch Booster • Wear Sensor1. Automatic Slack Adjusters • Clearance Sensing • More than 500 variants available o Can supply an MEI replacement for every Haldex ABA • Accessories such as mounting brackets, wear indicators, etc. are available • Custom requirements can be met on request 27ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  28. 28. 2. Self-setting Automatic Slack Adjusters • Based on patent-pending MEI designs o Functionally equivalent to Haldex SABA design • Multiple variants available o Can supply an MEI replacement for every Haldex SABA • Accessories such as mounting brackets, wear indicators, etc. are available • Custom requirements can be met on request 28ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  29. 29. 3. Manual Slack Adjusters • More than 300 variants • Cover most global truck, trailer, bus applications o Review our catalog for an exhaustive cross-reference table • Guaranteed to exceed SAE performance requirements • Custom requirements can be met 29ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  31. 31. 3.5 Slack Adjuster Manufacturing ProcessManufacturing of Slack Adjusters at MEI involve the following activities • Machining of the Slack Adjuster Body • Machining of the Worm Gear at the Ambattur Plant • Machining of the Worm & Worm Shaft at the Ambattur Plant • Sourcing of all remaining components from out source • Assembly of all components to make a Manual or Automatic Slack AdjusterThe customer order process flow can be shown as below. 1. Order receipt from customer 2. Sale order raising by Marketing 3. Sale order schedule by Marketing 4. Sequence posting by PPC 5. M.R.P report generate by PPC 6. Priority wise material requirement to SCM by PPC 7. Schedule to supplier by SCM 8. Skid list preparation by dispatch 9. Order process based on skid plan in ERP by PPC 10. Skid wise route card process by PPC 11. Order wise skid wise casting issue to Machine shop by Store 12. Order wise skid wise machining by Production 31ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  32. 32. 13. Skid wise sent to tuffriding process to s/c by Production 14. Skid wise process at tuffriding – s/c 15. Skid wise Assembly by productionThe Tuffriding is a special heat treatment process. Tuffriding is done after the machiningprocess. But this is not carried out in MEIL plants. The tuffriding process is outsourced tothe following companies a. Surface Techniques b. Chennai Auto Metal productAfter machining the skid wise organized parts are sent to the above companies for tuffriding.After Tuffriding, the parts are brought back to the MEIL plant for painting and assemblyprocess.Outsourcing & sub-contracting emphasis• MEI works with numerous sub-contractors who have specialized skills in various machining, heat-treating, surface treatment activities• MEI’s supply chain team ensures that all suppliers and contractors meet MEI’s stringent quality metrics 32ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  33. 33. 3.6 DEPARTMENTSDEPARTMENTS IN DETAILSMadras Engineering Industries Pvt Ltd has ten major functional departments for ensuring thesmooth working of the organization. They are: 1) Marketing Department 2) PPC Department 3) Supply Chain Management Department 4) Quality Assurance Department 5) Stores 6) Maintenance Department 7) Production Department 8) Finance Department 9) HR Department 10) R & D Department 33ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  34. 34. 3.6.1 MARKETING DEPARTMENTThe main and major aim of marketing department is to identify the market demand andsupply the goods as per the demand. Marketing department in MEIL is differential, whichmainly focuses on promoting the goods produced and gather a realizable order for thecompany such that at no time there is stagnation experienced in the enterprise due to lack oforders and such that the delivery can be made as per the predefined data. When we compareMEIL with other similar industries, the advantage is that it is located in the SpecialEconomic Zone (SEZ), which exempts most of the duties and taxes imposed by thegovernment. The labor overhead charges occurring in MEIL is low as compared to theforeign industries. The marketing department plays a vital role in the production planning asa constant feedback of the quality of finished products is verified regularly to check thepossibility of finishing the production of the user specified products in time.Structure of marketing department VP- Marketing Dy. General Manager-Marketing Senior Officer – Excise Assistant & ExportFunctions of marketing department 1) Following the quality management system 34ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  35. 35. 2) Management review 3) Internal communication 4) Customer communication 5) On Time response to enquiries 6) Following up with production/relevant functions to ensure on time delivery 7) Invoice & Shipment 8) Handling of customer complaints 9) Customer satisfactionExport trend analysisThe export trend analysis of last three years shows that MEIL is growing their business inthe global market. During the 2010-11 periods, the export has almost doubled comparing tothe 2009-10 period i.e. around 197%. During the 2011-12 periods, the export has increased,but the percentage has come down to 108%. The below graph shows the percentage changein exports during the last three years. The linear forecast trend line shows a positive growthtrend for the next few years. 35ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  36. 36. Customer Satisfaction Survey 36ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  37. 37. MEIL focus on both domestic and international market.Domestic marketThe Ambatur plant and 80% of Maramalai Nagar plant production is for domestic purpose.The main OEM customers are 1. Ashok Leyland 2. TATA Motors 3. Volvo Eicher Commercial Vehicles 4. Swaraj Mazda 5. Asia Motor Works 6. Bharath Benz(Daimler) 7. Mahindra NavistarInternational marketThe MEIL plant in Mahindra World City caters to the International market. The main globalcustomers are 1. KAMAZ, Russia 2. Arvin Meritor, USA and Italy 3. Gigant, Germany 4. SAF, Germany 5. Knorr Bremze, UK and Brazil 6. Scania, Sweden 7. FEBI, Germany 37ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  38. 38. 8. Boowon Autoparts, Korea 9. MAN, Germany 10. BPW, U.K. 11. KTK, Germany 12. Diesel Technic, Germany 13. MASTER, BrazilThe Ambattur plant and the plant at Maraimalai Nagar are mainly working on the domesticmarket and the Mahindra World City plant is focusing on the international market. The plantat Maraimalai Nagar also produces manual slack adjusters for the overseas customers.The marketing department collects the product order and the required dispatch date fromvarious customers. For export, the orders are obtained from OEM customer Kamaz and fromthe marketing partner John Bruce UK. Based on this, marketing department prepares thesales order and hands over to production department. This will be usually done 15 daysahead of a month. Similarly is the case with domestic market also. The final requirement forthe month is prepared on the 1st of the respective month. No more revision is done untilunless the change is inevitable from the customer side due to any urgent requirement. Thefinal dispatch plan is prepared and given to PPC. The production will be planned accordingto this plan.Once the production is completed, the marketing department will verify it based on the initialrequirement plan and gives the approval for raising invoices for shipment to dispatchdepartment. The dispatch department will prepare the invoice and shipment documentsagainst the Performa invoice/Purchase Order. They will make the arrangements to take theconsignments to the freight forwarder who is nominated by the respective customer.The main payments modes are followed in MEIL are: 1. Direct payment – The amount will be collected from the customer in advance i.e. before the consignment is send. 2. Payment against document – payment is done after the consignment is shipped. The bill of lading and other originals will be handed over to customer directly. 38ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  39. 39. 3. Letter of credit - In this mode, a bank will act as a mediator between the customer and MEIL. A contract is prepared based on this. The bank will act as a guarantee for the customer for all the purchase done between the customer and MEIL. Based on the terms and conditions mentioned in the LC, MEIL should act. 4. Freight on board: MEIL submit the full set of shipment document such as bill of lading, shipping bills, packing list and other original invoices through the mediator bank. The bank will send the originals to the customer bank. The total payment is taken care by the banker. The customer makes the payment after verifying the Performa Invoice.Promotional activities: MEIL take part in the automobile exhibitions conducted in theinternational and the domestic market. The strength of MEIL is delivering high qualityproduct at a competitive price which itself act as a promotion.Customer satisfaction survey: Currently the customer satisfaction survey is carried only forfew OEMs which need to be carried out covering the wider range of customers. This is anarea for improvement.New marketing activities: Looking to capture the market through product diversification inthe same product line. MEIL has a strong R&D department with Govt. of India approval.This helps MEIL to develop innovative and high quality products.Customer complaints: The customer complaints are given high importance and immediateaction is taken care. The customer complaints are received by the marketing department.Marketing department assigns a unique id to the complaint and communicate the details tothe quality assurance department. Then a meeting will be arranged between the membersassociated with the particular issues and then handles the issues through 8D problem solvingprocess/report.The 8D problem solving process includes the following steps. 1. D0 – Customer Reported Problem 2. D1- Team formation 3. D2 – Problem Description 39ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  40. 40. 4. D3 a. Containment Action b. Interim Corrective Action c. Validation 5. D4 a. Occur Root Cause b. Escape Root Cause(s) 6. D5 a. Occur permanent corrective action chosen b. Escape permanent corrective Action(s) chosen 7. D6 a. Occur Permanent Corrective Action(s) Implemented b. Escape Permanent Corrective Action(s) Implemented 8. D7 –Preventive Action 9. D8 – Team and Individual Recognition 40ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  41. 41. 3.5.2 PPC DEPARTMENTPPC is the planning and scheduling department in MEIL. Its plays an important role in theproper functioning of MEIL. The marketing department communicates with PPC to handlethe sales orders raised by customers. The organization structure of PPC department is asfollows: President HOD - PPC Assistant PPC 41ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  42. 42. In the Customer Order process flow in MEIL, the PPC handles the following actions 1. Sequence posting by PPC 2. M.R.P report generate by PPC 3. Priority wise material requirement to SCM by PPC 4. Order process based on skid plan in ERP by PPC 5. Skid wise route card process by PPCPPC prepares the monthly and daily schedule regarding the manufacturing of the product asASA and SASA. Based on order receipt from customer, the marketing dept raises the salesorder and sales order schedule. Sales Order is then given to PPC.The first sales order for a particular month is raised 10 to 15 days prior to the month. ThenPPC prepares the purchase schedule and the manufacturing schedule based on the salesorder.The purchase schedule is given for the Supply chain management department and themanufacturing schedule is given to the stores department. PPC manages the entire processwith the help of ERP.In the PPC process, the first step is sequencing posting. PPC prepare the schedule on theproduction target for the month. The sequence report is generated in ERP. Based on thisschedule, the monthly production is scheduled and carried out. (Based on revised sales orderfrom marketing dept, the sequence is updated.)Based on sequence posting, M.R.P report is generated. The material requirement is analysedand as per the production request generated by marketing department the M.R.P. is prepared.This is used by purchase dept. PPC also manages the day to day material requirement for themanufacturing (based on daily production schedule).Daily analysis on the jobs completed is also done based on the schedule prepared by PPC.Priority wise material requirement is given to supply chain management by PPC.And skid plan is also prepared by ERP and based on skid plan, order process is carried out.Skid wise route card process is also done by PPC.PPC maintain update on the entire customer order process flow. i.e. product finishedproduction in manufacturing section, in assembly section etc.Route card process is the process of tracking the work progress in manufacturing section.Each bin that reaches the machine shop contains a route card. One bin can contain maximum 42ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  43. 43. of finished body(min of 1). The route card has approval space for the four stages ofmanufacturing. As each stage in machine shop gets over, the section supervisor should verifyand enter the approval signature in the respective column entry in the route card. Each bincarries cast body of particular part no, and the route card also contains all info pertaining topart no.3.5.3 PURCHASE DEPARTMENTPurchase or supply chain department (SCM) is one of the important departments in MEIL.SCM ensures that the right quality of goods is available at the right time and right placewithout any delay. SCM ensures the availability of the required material at the right time atright quantity to different departments for smooth functioning of the organization. Each planthas its own SCM department for managing the inward and outward flow of raw materials.Structure of Purchase department: PRESIDENT HOD-Purchase 43ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  44. 44. Assistant Purchase3.5.3.2 Functions of Purchase departmentOne of the primary tasks of SCM is Supplier selection. It is done in the following way. a) Supplier registration b) Supplier audit – Onsite evaluation (it should > 70%) c) Vendor code creation d) Purchase Order raising e) Initial sample (prototype) released a. Further sample version are alpha, beta, QP1, QP2, QP3 b. Mass productionOnsite EvaluationThe onsite evaluation is conducted Vendor rating. There are various criteria in onsiteevaluationThey are 1. Pricing of the material for supply 2. Checking with the vendor’s customer list to check whether they supply for the competitors 3. Supplier’s approved vendor list.Supplier selection from the approved listChoosing the right vendor from the approved vendors list is other major tasks of SCM. Thefollowing steps are taken in this process. 1. Identify the component for purchase and their design 2. Choose the associated vendors from the approved vendor list 3. Send the design to the vendor and collect feasibility and collect the quotation 4. Compare the quotation the price quote prepared by MEIPurchase order planThe M.R.P prepared by the PPC is given to SCM to prepare the purchase order plan. 44ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  45. 45. a) SCM prepare the schedule of purchase based on M.R.P and priority requirement i.e. may be daily, weekly or monthly basis)Schedule for supplier – The schedule is prepared by SCM are given to supplier to ensurethe prompt supply of raw materials. The supplier will give acknowledgment for the scheduleof raw material. a) SCM has to ensure the prompt supply of the raw materials form the supplier as per the scheduled plan.Material Reception – the material received in the stores is first verified by inspectiondepartment and standard lab. The accepted products are then moved to the store. Therejected materials are cross verified by the SCM dept with master piece and ensure the actualreason for the rejection before communicating to supplierERP is the software application used by SCM. It is used for monitoring the task, and forscheduling the purchase plan.3.5.4 QUALITY DEPARTMENTThe receiving inspection department verifies the quality and dimensions of raw materialsthat are received from approved vendors against the values addressed in their respectivedesigns.RI handles the selection and approval of both brought-out and sub-contracted components,Once the GRN note is issued by stores department for the brought in goods, the componentsare received and taken to the receiving inspection department. The quality check is donethrough sampling techniques. Standard sampling plans are followed by RI. The organizationstructure of quality department is as follows: HOD-Quality 45ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  46. 46. Assistant Manager Senior Engineer Engineer Junior Engineer Metallurgists3. Functions of Receiving InspectionRI dept follows a specific working instruction for sampling plan. As per the sampling plan,the components are categorized to 4 major inspection levels. They are S1, S2, S3, S4.(S1 –Casting , packing, welding, wooden etc. s4 – Springs, Rubber/Plastics.For each Inspection levels, the sample size is determined based on ISO 2859 AQL 1%standard for different batch size. For example, for a batch size of 2 to 8, S1, S2, S3, S3sample size is 2. For batch size of 35,001 to 150,000 the sample size component wise is S1 –8, S2 – 13, S3 – 32, S4 – 80.RI inspects the following factors for a new supplier: • Dimension • Material • Test Rig 46ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  47. 47. For the above RI inspections, the acceptance number is 0 and the rejection number is 1.For critical components as Rack, pinion, worm shaft, etc., double sampling plan is conducted100% checks are carried out for the reworked parameters as applicableOnce the components are accepted, they are forwarded to the metallurgic laboratory for thequality test. The rejected materials are kept in the rejection section of store and returned tothe supplier.The inspection results are updated through ERP and reports are generated based on whichthe vendors rating are prepared by the SCM department. METALLURGIC LABORATORYMetallurgic Laboratory ensures conformance to material specifications. After the dimensionverification by receiving inspection department the samples will be send to the metallurgiclaboratory for the material quality test. ML department has specific process flow for thequality check.Lab test associated with the quality check. In this, they check for the components hardnesstest and the tensile test.Quality is checked against the standards. If not matching the component is rejected.Accepted components are taken to the stores.Facilities in Metallurgic Laboratory include • A complete chemical & mechanical lab • Digital image analyzer • Magnetic crack detector 47ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  48. 48. 3.5.5 STORESThe main function of stores is to maintain the stock of necessary components used forproduction. The organization structure of stores is as follows: President HOD - Stores 48ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  49. 49. Officer stores Staff3.5.5.1 Functions of StoresThere are mainly two type of store. i) Casting store ii) Component storeCasting store contains the casting raw material associated with machine shop and thecomponent store consists of raw materials associated with assembling. The entirefunctionalities are managed with the help of ERP.he marketing department plays a vital role in the production planning as a constant feedbackof the quality of finished products is verified regularly to check the possibility of finishingthe production of the user specified products in time.Material management flow: Sales order Production work order Purchase Order 49ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  50. 50. Job Order Gate Inward Goods received Management Quality Clearance StoresStore Process 1. Stores receives the M.R.P report from the PPC 10 days ahead of the months production (revision may take place in between). Purchase order is generated by SCM and job order is processed 2. Goods Received Note is given by stores department that permits the supplier to unload the materials at the store entrance 3. Mainly 3 invoices are issued at the receiving the materials. One for the stores, one for accounts and one for excise. 4. Materials taken for inspection at receive inspection department. 5. From RI, the sample components taken for Laboratory test 6. After the quality checks, the materials are taken to stores 7. Accepted components kept in the store (after categorizing) 8. Rejected components will be kept to return to the supplier 9. Assembly components returned within one week 10. Assembly components are kept in bin. Each bin contains store card 11. The operators can take the required components and entered in the store card 12. From the store card it is updated in ERP 50ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  51. 51. 13. Department has to ensure maintaining min stock for 5 days 14. Another important task of Stores is the issue of Delivery channels and CRS while sending the casting materials to tuffriding from the machine shop.3.5.6 PRODUCTION DEPARTMENTProduction department is the major department in MEIL. It handles the production of ASA,SASA and manual slack adjuster in MEIL. The main function of the production departmentis to manage the production of the different products as per the production schedule preparedby PPC. The organization structure of production department is as follows: DGM AGM 51ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  52. 52. Asst Manager Senior Engineer Engineers Junior Engineer3.5.6.1 Functions of Production departmentThe production department can be divided into two sections. They are Machine shop andAssembly.The process flow of Production department is as shown below:i) Machine Shop 52ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  53. 53. The main functioning of machine shop is machining the body part to assembly form. Theraw cast is converted in to main body part as per the design specifications.PPC prepares the production work order for a month. This will be handed over to theproduction department.A skid list is prepared based on which the casting is performed. Based on the skid list, routecard process is prepared by PPC. Then store will issues order wise skid wise castings toMachine shop. (casting store -> Machine shop).Now the production starts in the machine shop. Order wise skid wise machining is carriedout by the Production department.The part number is generated for each casting. A bin of 10 casting raw material is given tothe machine shop. The bin contains the route card that specifies the 4 stages of machineshop. When each stage gets completed for a bin, the route card is filled by the respectivesupervisor. This help to identify the proper flow of machine shop process.The 4 stages of machine shop for ASA are i. Pre machining ii. Finish machining iii. Tail hole iv. Nipple hole drillingThe features of Machine shop are • Specially designed body machining lines including o Special purpose-built machines o General purpose Horizontal Machining centers • Versatile fixtures & tooling designed o Support hundreds of body types 53ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  54. 54. o Changeover times of <5 minutes • Extensive gauging and on-line process control methods utilized o Ensures very low rejection o Sustains high Cpk valuesii) Tuffriding: The next stage after machining is tuffriding. Tuffriding is a heat treatment process which is Sub-Contracted to two companies i) Chennai Auto metal industry ii) Surface Techniques. the components are sent to tuffriding process by Production on skid wise basis. Skid wise process at tuffridingiii) Painting: After heat treatment, the part is brought back to MEIL. It is taken to the painting section. The body will be coated with the indented colour.iv) AssemblyThe main functioning of assembly department is to assemble the components with the mainbody part to form the final slack adjuster.After tuffriding and returned to the company, the body is painted and send for assembling.Assembly section assembles all the body parts together to form the final product. Theassembly assembles the parts in skid wise basis. There are two separate assembly section forASA and SASA. The assembling process includes 5 stages.The stages of assembly are: i. Tail bush ii. Worm gear and worm shaft assembly iii. End float and rack assembly iv. Greasing and spring retaining v. Performance testingThe main features of assembly line are 54ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  55. 55. • Flexible manufacturing lines with MOQ per part number = 1 • All models of automatic slack adjusters assembled on the same line • Poka-yoke elements included to ensure error proofing • Automated testing and performance data storage • Traceability by Serial number • Marking, labeling and packing done on-linev) Once the assembling is finished the parts are packed in the packing section and make it ready for dispatch.Packing models are of two types: • Y packing – for OE customer • Aftermarket packing – for aftermarket sales. It also contains instruction paper within the packet.In production, average daily production targets will be set based on the monthly requirementfrom PPC. Every day evaluation is conducted to analyze the day to day production andupdates the average production target accordingly.3.5.7 MAINTENANCE DEPARTMENTMaintenance department is an important department the take care of the proper working ofthe entire plant. The organization structure of the maintenance department is as follows: DGM 55ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  56. 56. AGM Asst Manager Senior Engineer Engineers Junior Engineer3.5.7.1 Functions of Maintenance departmentThe main functions of maintenance department are to make sure that all the machines areworking properly and the production process carried out uninterruptedly. They look after allthe issues associated with the machines in the plant (both machine shop and assembly),electrical and electronic components. The maintenance department also handles the purchaseof new machines for the plant.The user departments inform the maintenance department about any breakdown of machinesor equipments using a job requisition format. The maintenance person attends the complaintson priority and emergency basis after the job requisition if the break down can be set right bythe in house facility. In case if the break down cannot be rectified in house the work istransferred to an external agency through purchase and planning department.When the work is completed, it is collected and after verification it is transferred to theconcerned department. The details of all maintenance done are recorded in the equipmentmaintenance chart. 56ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  57. 57. 3.5.8 HUMAN RESOURCE DEPARTMENTHR department is the most important department in a business concern. Proper managementof human resource is very essential.Structure of HR department General Manager 57ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  58. 58. HOD – Personnel Staffs3.5.8.1 Functions of HR departmentThe main functions are • Conducting job analysis • Planning labour needs and recruiting job candidates • Selecting job candidates • Conducting orientation and training programs for new employees • Managing wages and salaries • Providing incentives and benefits • Appraising the performance • Communication with employee (interviewing, counselling, discipline) • Training and developing managers • Building employee commitment3.5.8.2 Administrative Function a. Liaoning with government and local bodies b. Correspondence with various government and non government organization. All the Internal and external mail, letter and memo, registered items handled by this department 58ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  59. 59. c. Security – A well equipped security forced is provided for safeguarding everything inside the factory complex. d. Monitoring the daily inward and outward dispatch. Personnel Function a. Man power planning b. To ensure optimum use to human resources employed. c. To determine further recruitment level. d. To forecast further skill requirements that will serve as a basis foe training and development programs. RecruitmentRecruitment is the process of searching right persons and stimulating them to apply for job inthe organization. Recruitment in MEIL is carried out based on departmental requirements. a. Executives – Asst. manager and above i. Recruitment done through reference or consultants. Probationary period of 6 months ii. CV is collected from the employees. It is scrutinized an d list for interview is prepared based on this CV. Interview is conducted under the observation of HR and the respective departmental HOD. Conducted in the corporate office b. Staff – Supervisors, line employees i. Recruitment done through reference or consultants c. Machine Operators-they are selected from local environment. First 2 years, they are employed as trainees and the 3rd year will be probation period. After this, they will be promoted as permanent employees. Employees are selected 59ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  60. 60. strictly based on their educational qualification, work experience, technical knowhow and age. Induction a. 12 day induction program is conducted for the newly selected employees b. 6 day class room training and 6 days on the job training c. Conducted by the HODs and HR d. During the induction program the company policies, rules and regulation, plant overview, job overview are explained to the employees e. The induction helps the employees to gain information on the company and the operation carried out3.5.8.6 Training a. Annual training plan is prepared and conducted throughout the plant b. Training conducted for the employees at all levels c. After training, the effectiveness analysis is conducted. d. Different trainings conducted are: i. Orientation training ii. On the job training iii. External training iv. Internal training3.5.8.7 IR a. HR plays an important role to maintain good relationship between the employees and the departmental heads. 60ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  61. 61. b. Frequent meetings are conducted between the HOD and the employees c. Monthly departmental review meeting is also conducted to make the employees aware of the departmental performances. Grievance handling a. Grievance handling is done by HR and the associated departmental heads. Employee grievance is given greater importance in MEIL. Immediate action will be taken in case of grievance. Separation a. Notice period of 1 month. b. No specific exit interview conducted. c. Separation procedures are done manually3.5.8.10 Attendance management a. The employee attendance management is also carried out HR department. b. Punch card system for permanent employees c. Manual attendance management for the contractual employeesThe HR department takes care of the following statutory functions also a. Companies holydays calendar making b. Salary and other remunerationAll of the executives, trainee workers and operators earn salary on the last working day ofevery month.Salary structure consists of;- a. Basic pay 61ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  62. 62. b. Fixed DA c. HRA d. Conveyance & other allowance.3.5.9 FINANCE DEPARTMENTFor smooth functioning of every organization proper money management is essential. Onlythrough proper money management a firm can identify it strength and weakness in thefinancial structure. The MEIL also give great important to its financial department. Financial Functions1. Passing and settlement of all miscellaneous advances. 62ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  63. 63. 2. Perform all works connected with insurance coverage of fixed asset.3. Keeping personnel file of employees relating to salary computation and annual increment.4. Prepare profitability trend reports and wage analysis.5. Quarterly and yearly financial report preparation.6. Making bank statements7. Preparation assisting the coordination at all works connected with8. Finalization of accounts.9. Assisting statutory/ vigilance/ auditors from head quarters.10. Make internal and external purchases3.5.9.1 Structure of financial department Senior General Manager HOD – Finance Senior officer AccountsCapital budgetingThe capital budgeting is done at the beginning of the year itself. The requirement of capitalwill be specified for approval. During the budgeted year, if any further requirement of capitalis faced then a proper justification has to be made. If the requirement is seen as an importantone then approval of the capital is sanctioned.Cash management 63ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  64. 64. Cash management system is one of the key areas in any business. Apart from the fact that itis the most liquid asset, cash is the common denominator intoWhich all current assets can be reduced because other major liquid assets, receivable andinventory get eventually converted into cash.Credit control functionA trade credit arises when a company sells on credit and does not receive cash immediately.A company grants credit to protect its sales from the competitors and to attract potentialcustomers to buy its product at favourable terms. Credit period allowed is 6 days to 90 days.The collection of credit will be handled by senior sales officers up to 180 days and it will behanded over to the factory manager. The company will give the creditors a further extensionof one month ,then legal action will be taken against the person or the company. If thecheque has bounced or has been dishonoured then the company can sue or take legal actionagainst the person or the company.Planning of fundsPlanning of funds is a careful estimate made by the manager about the total funds required.This is the estimation done by the observation over the physical activities of the company.Allocation of fundsProviding funds to proper place at proper time is also an important task to be done by thefinancial manager. He studies the cash requirement of each department and then funds aredistributed.Recording of transactionsEach and every transaction that takes place in the company has to be recorded properly forthe purpose of having better control over the funds and optimality. All the transaction arerecorded in journal and posted to the ledgers.Fixed assets 64ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  65. 65. Fixed assets form the major part of the working of any company. Depreciation of fixedassets is charged on diminishing balance method.Cost controlThe cost is controlled either in the acquisition of raw materials or reduction in operatingexpenses or both, as there should be limitation in the utilization of funds. The companywill always have a comparison of budgets and actuals. SIGNIFICANT ACCOUNTING POLICIESBasis of AccountingThe financial statements are prepared under the historical cost convention on accrual basis,except as otherwise stated and in accordance with the applicable accounting standards.Use of estimatesThe presentation of financial statements in conformity with the generally acceptedaccounting principles requires estimates and assumptions to be made that affect thereported amount of revenues and expenses during the reporting period. Fixed asset arestated at historical cost less depreciation written off and impairment in value, if any, isadjusted.Depreciation1. Depreciation on assets is provided at the rate prescribed in schedule XIV to thecompanies Act, 1956 as under; a) In respect of plant and machinery, on straight line method b) In respect of other assets, on written down value method2. Depreciation on tools and moulds is provided on written down value method at the rateof 33.33% p.a on technical assessment, which is higher than the applicable rate prescribedin schedule XIV to the companies Act 1956. 65ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  66. 66. InvestmentsThese are valued at cost and permanent fall in long term investment if any is provided for.InventoriesInventories are valued at lower cost or net realizable value. For this purpose the cost ofbought out inventories comprises of the purchase cost of the items and cost of bringing theitems to factory on FIFO basis. The cost of manufactured inventories comprises the directcost of production plus appropriate overheads.Foreign currency transaction Monetary items denominated in foreign currency are reported at the exchange rateprevailing as at the date of the balance sheet and the resultant exchange gain /loss, if any, hasbeen adjusted to the profit and loss account, to the extent they relate to items other thanliabilities incurred for acquiring for fixed assets. Those relating to liabilities for fixed assetshave been adjusted to the carrying cost of the respective assets.SalesRevenue is recognized when the significant risk and rewards of ownership of goods havebeen passed to the buyer. Gross sales are inclusive of excise duty and are net of tradediscount.Retirement benefitLiabilities of gratuity for employees determined based on actuarial valuation as on thebalance sheet, date is funded with the Life Insurance Corporation of India, and thecontribution there of payable is absorbed in the accounts. Liability for leave encashmentbenefit determined based on actuarial valuation as on the balance sheet date is provided forin the account. 66ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  67. 67. 3.5.10 RESEARCH AND DEVELOPMENTMEIL has pioneered the indigenous development of Self Setting Automatic Slack Adjusterfor the global market. It has also developed Clutch Booster, Spring Brake Actuator, BrakeChamber and Wear Sensor, the commercial production of which will commence soon.MEI’s R & D centre at the IITM res Park, Chennai is recognised by the DSIR, Ministry ofScience & Technology, Government of India. MEI’s R & D is continuously involved in theprocess of product improvement, new product development etc. fulfilling customers needsand demand 67ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  68. 68. R & D helps in delivering high quality products from MEIL. R & D focus on design andtesting of the products. It also ensures product performance to SAE and customer specifictest normsStructure of R & D department:Major facilities available in R & D are • Durability/Lifecycle test rigs • Endurance test rig • Dynamic Salt Spray test rigMEI got 2 approved patents also.The major projects currently undergoing in R & D are 1) Clutch booster 68ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  69. 69. 2) Wear sensor 3) Slack Adjuster 4) Caliper 5) PLM Implementation CHAPTER 4 EXTENT OF TECHNOLOGY ADOPTION 69ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  70. 70. The IT department takes care of the information and communication technology matters inthe MEIL plants. There is 5 dedicated staff in the whole MEIL plants. The IT departmentalstructure consists of one HOD and 4 staff. They provide the main IT related services in theentire organization. It includes IT administration, services, software updating, systemconfiguration, ERP customization and management, report generation etc. One IT employeeis available in each plant to take care of IT related issues.4.1 ENTERPRISE RESOURCE PLANNINGAll department of MEIL function as a part of ERP, which functions as a root base, thusinterlinking of all departments functions effectively so as to result in a smoother functioningof the organization. This department deals with the overall working of the enterprise.Previously each department functioned as a single non-related entity which resulted inrestricted access of valid documents between departments. This in turn resulted in aconstriction in the working, which was eliminated with the introduction of ERP. It interrelated the department and gave access to the documents of each unit to authorized personneleven if that particular person is not a part of particular department. For this purpose ERPuses specialized software, which enables the unit to maintain the record of each departmentin an ordered manner on an oracle database in user friendly layman terms, hence enablingevery person with authorization to access the database. The reports from all departments areincorporated into the database. Initially a user has to sign in on the database with a user IDand password provided. He then gets access to the list of the data from departments. Themajor modules covered by ERP in MEIL are 1) Common masters 2) Marketing/sales 70ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  71. 71. 3) Design 4) PPC 5) Purchase 6) Security 7) Inventory 8) Subcontract 9) Quality 10) Production 11) Payroll 12) AccountsERP modules have a common server in the backend. This helps data sharing more effectiveamong the entire company.The ERP software is self customized by the MEIL IT department. As per the requirementsthe modification are carried out.Report generation for the entire modules is carried out by the IT manager. 71ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  73. 73. 5.1 ISO CERTIFICATIONSThe ISO 9000 family of international quality management standards and guidelines hasearned a global reputation as a basis for establishing effective and efficient qualitymanagement systems. The need for International Standards is very important as moreorganizations operate in the global economy by selling or buying products and services fromsources outside their domestic market.Madras Engineering Industries Pvt Limited is certified ISO 9001:2008. ISO 9001:2008 is theInternational Standard for Quality Management Systems (QMS). It provides your companywith a set of principles that ensure a common sense approach to the management of yourbusiness activities to consistently achieve customer satisfaction.Any organisation can benefit from implementing ISO 9001:2008 as its requirements areunderpinned by eight management principles: • a customer focused organisation • leadership • the involvement of people • ensuring a process approach • a systematic approach to management • a factual approach to decision making • mutually beneficial supplier relations 73ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  74. 74. ISO/TS 14001MEI is awarded with ISO 14001:2004 certification. ISO 14001 is an internationally acceptedstandard that sets out how you can go about putting in place an effective Environmental ManagementSystem (EMS). The standard is designed to address the delicate balance between maintainingprofitability and reducing environmental impact; with the commitment of your entire organization, itcan enable you to achieve both objectives.What’s in ISO 14001 • General requirements • Environmental policy • Planning implementation and operation • Checking and corrective action • Management reviewSo ISO 14001 is relevant to every organization, including: • Single site to large multi-national companies • High risk companies to low risk service organizations • Manufacturing, process and the service industries; including local governments • All industry sectors including public and private sectorsISO/TS 16949MEI is also awarded with ISO16949:2002. ISO/TS 16949:2002 has been developed by theindustry, the International Automotive Task Force (IATF), to encourage improvement inboth the supply chain and the certification process. In fact, for the majority of leading vehiclemanufacturers, certification to this specification is a mandatory requirement for doingbusiness.ISO/TS16949:2002 is relevant to all types of automotive supply companies, from smallmanufacturers to multi-site multinational organizations located anywhere in the world.However, it is only applicable to sites where production or service parts are manufactured.Organizations wishing to break into the automotive market must wait until they are on an 74ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  75. 75. automotive customers potential supplier list before they can progress with certification tothis specification.5.2 SIX SIGMASix Sigma at many organizations simply means a measure of quality that strives for nearperfection. Six Sigma is a disciplined, data-driven approach and methodology foreliminating defects (driving toward six standard deviations between the mean and the nearestspecification limit) in any process -- from manufacturing to transactional and from productto service. To achieve Six Sigma, a process must not produce more than 3.4 defects permillion opportunities. ASix Sigma defect is defined as anything outside of customer specifications. A Six Sigmaopportunity is then the total quantity of chances for a defect.The fundamental objective of the Six Sigma methodology is the implementation of ameasurement-based strategy that focuses on process improvement and variation reductionthrough the application of Six Sigma improvement projects. This is accomplished throughthe use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six SigmaDMAIC process(define, measure, analyze, improve, control) is an improvement system forexisting processes falling below specification and looking for incremental improvement. TheSix Sigma DMADV process (define, measure, analyze, design, verify) is an improvementsystem used to develop new processes orproducts at Six Sigma quality levels. It can also be employed if a current process requiresmore than just incremental improvement. Both Six Sigma processes are executed by SixSigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master BlackBelts.Thus, Six Sigma = TQM + Stronger Customer Focus+ Additional Data Analysis Tools + Financial Results + Project Management5.3 5S 75ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  76. 76. 5S is the name of a workplace organization methodology that uses a list offive Japanese words which are seiri, seiton, seiso, seiketsu and shitsuke. Transliterated ortranslated into English, they all start with the letter "S". The list describes how to organize awork space for efficiency and effectiveness by identifying and storing the items used,maintaining the area and items, and sustaining the new order. The decision-making processusually comes from a dialogue about standardization which builds a clear understandingamong employees of how work should be done. It also instills ownership of the process ineach employee.Phases of 5SThere are 5 primary phases of 5S: sorting, straightening, systematic cleaning, standardizing,and sustaining. Additionally, there are three other phases sometimes included; safety,security, and satisfaction.Sorting (Seiri)Eliminate all unnecessary tools, parts, and instructions. Go through all tools, materials, andso forth in the plant and work area. Keep only essential items and eliminate what is notrequired, prioritizing things as per requirements and keeping them in easily-accessibleplaces. Everything else is stored or discarded.Straightening or setting in order / stabilize (Seiton)There should be a place for everything and everything should be in its place. The place foreach item should be clearly labeled or demarcated. Items should be arranged in a manner thatpromotes efficient work flow, with equipment used most often being the most easilyaccessible. Workers should not have to bend repetitively to access materials. Each tool, part,supply, or piece of equipment should be kept close to where it will be used – in other words,straightening the flow path. Seiton is one of the features that distinguish 5S from"standardized cleanup". This phase can also be referred to as Simplifying.Sweeping or shining or cleanliness / systematic cleaning (Seiso)Clean the workspace and all equipment, and keep it clean, tidy and organized. At the end ofeach shift, clean the work area and be sure everything is restored to its place. This makes iteasy to know what goes where and ensures that everything is where it belongs. Spills, leaks, 76ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  77. 77. and other messes also then become a visual signal for equipment or process steps that needattention. A key point is that maintaining cleanliness should be part of the daily work – notan occasional activity initiated when things get too messy.Standardizing (Seiketsu)Work practices should be consistent and standardized. All work stations for a particular jobshould be identical. All employees doing the same job should be able to work in any stationwith the same tools that are in the same location in every station. Everyone should knowexactly what his or her responsibilities are for adhering to the first 3 Ss.Sustaining the discipline or self-discipline (Shitsuke)Maintain and review standards. Once the previous 4 Ss have been established, they becomethe new way to operate. Maintain focus on this new way and do not allow a gradual declineback to the old ways. While thinking about the new way, also be thinking about yet betterways. When an issue arises such as a suggested improvement, a new way of working, a newtool or a new output requirement, review the first 4 Ss and make changes as appropriate.5.4 LEAN CONCEPTSLean Concepts or Lean Manufacturing is a systematic methodology that identifies andeliminates all types of waste or non-value-added activities; not only in production ormanufacturing operations, but in the service industry as well. Whether you aremanufacturing a product or providing a service, there are components that are considered"waste". Lean concepts are purely about creating more value for customers by eliminatingactivities that are considered waste. Any activity or process that consumes resources, addscost or time without creating value becomes the target for elimination.Lean focuses on the "big picture" or improvements in the entire business process as opposedto incremental improvements. It is the business process system that can significantly improvea companys profitability.Lean concepts improve operating performance by focusing on the continuous flow ofproducts, materials or services through the value stream. To achieve this, the various forms 77ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT
  78. 78. of waste must be identified and eliminated. Waste can include any activity, step or processthat does not add value for the customer.Lean Manufacturing, sometimes also referred to as the Toyota Production System, is aboutthe systematic elimination of waste.The Toyota Production system identifies seven major forms of waste. They are:Waste from Overproduction — producing more than is required by the customer ormarketplace which generates unnecessary inventory.Waste from Transportation — multiple handling or movement of products does not addany value to the product.Waste of Motion — of the workers, machines, and handling. Searching for tools or partsdue to the inappropriate location of these items is considered waste of motion.Waiting — a worker waiting for a machine to finish a cycle, waiting for a supervisor toanswer a question, or waiting for information or materials reflects an interruption to flow andneed to be eliminated.Processing — unnecessary processing steps should be eliminated. Combine steps wherepossible.Inventory — or Work In Process (WIP) is material between operations as a result of largelot production or processes with long cycle times. This reflects system problems.Defects — producing defective products are pure waste. Prevent the occurrence of defectsinstead of scrapping or repairing. 78ORGANIZATION STUDY 2011-13 SCHOOL OF MANAGEMENT STUDIES,CUSAT