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hi tech arai pvt ltd madurai

  1. 1. CONTENT CHAPTER 1Profile of the IndustryProspectsAssociationQualityExportsProfile of Hi-Tech Arai Pvt Ltd MaduraiMissionVisionQuallity & Environmental PolicyMilestonesCompany ProductsProfile of ProductsCompetitors of Hi-Tech Arai CHAPTER 2Introduction to Financial Performance AnalysisInvestments in IndustryIndustry TurnoverAccounts DepartmentFunction CHAPTER 3Marketing DepartmentSales DepartmentPurchase Department
  2. 2. CHAPTER 4Human Resource DepartmentTraining MeasuresHRD measuresSWOT Analysis CHAPTER 5Systems DepartmentEDP/ ERP departmentInternet and IntranetDevelopment CenterExcise DepartmentEngineering DepartmentQuality Management Department CHAPTER 65s Quality PrincipleSeiriSeitonSeisoSeiketsuShitsuke
  3. 3. CHAPTER 1 PROFILE OF THE INDUSTRY THE INDIAN AUTO ANCILLARY INDUSTRY The Indian auto ancillary industry is one of Indias sunrise industries with tremendousgrowth prospects. The automotive industry is an important segment of the economy in anycountry as it links many industries and services. The Indian auto industry has the potential toemerge as one of the largest in the world.Presently, India is:  The largest two-wheeler manufacturer in the world.  The largest three-wheeler market in the world.  The second-largest two-wheeler market in the world.  The fourth –largest commercial vehicle market in the world. The fortunes of the automotive components segment are linked to the performance of theauto industry. The auto ancillary industry gives support to sectors such as metals that includessteel, aluminum, copper and also to many other machine tools, plastics, rubbers, polymers, glass,surface transport. As per Indian Suppliers‟ report, The automotive sector in India contributes to5% of the nation‟s GDP and 17% of the indirect taxes as a result of which the government lastyear charted a 10-year blueprint for the sector‟s growth. This envisages the automotive sector“output reaching a level of $145 billion accounting for more than 10% of the GDP” by2016.Indian auto industry has evolved around three major clusters: Mumbai-Pune-Nasik-Aurangabad (west); Chennai-Bangalore-Hosur (south); and Delhi-Gurgaon-Faridabad(north).Export-oriented companies have formed base in the west/ south regions, due to proximityto port.
  4. 4. PROSPECTS Looking forward, the industry displays tremendous potential in generating employmentand boosting entrepreneurship in the country. The spate of new investment plans announced byglobal and domestic automobile manufacturers promises the emergence of India as a global hubfor auto components. The industry is transforming, and the boost in demand will see theemergence of several new players in the industry. The vast market for auto components, and thediverse products and technology involved ensures a place and role for many. At the same time,the entry of several global automobile manufacturers will bring in more regulation into theindustry and see a pruning of the spurious market. Among the smaller players in the unorganizedsegment, this implies moving away from being standalone companies, to entering into eithercontract manufacturing or being ancillary units. The newly defined rules are specialization,development and delivery that hold the key to success in the auto component industry.ASSOCIATION The Automotive Component Manufacturers Association of India (ACMA) is the nodalagency for the Indian Auto Component Industry. Its active involvement in trade promotion,technology up-gradation, quality enhancement and collection and dissemination of informationhas made it a vital catalyst for this industrys development.Its other activities include participation in international trade fairs, sending trade delegationsoverseas and bringing out publications on various subjects related to the automotive industry.ACMA is represented on a number of panels, committees and councils of the Government ofIndia through which it helps in the formulation of policies pertaining to the Indian automotiveindustry. ACMA represents over 600 Companies, whose production forms a majority of the totalauto component output in the organized sector. In the domestic market, they supply componentsto vehicle manufacturers, Tier-1 Suppliers, to state transport undertakings, defenseestablishments, and railways and even to the replacement market. A variety of components arebeing exported to OEMs and aftermarket worldwide.
  5. 5. Quality The industry has been making rapid strides towards achievement of world-class QualitySystems by imbibing ISO 9000/ISO14001/QS 9000/TS16949 Quality Systems. Till now 562companies in ACMA membership have been certified to ISO 9000, 208 companies awarded toISO14001, 445 companies have been certified with TS16949, 99 companies have been certifiedwith OHSAS18001, 15 Companies have won TPM Award, 11 Companies won the Deming prize1company won Japan Quality Medal, 1company won Shingo Silver Medallion and 3 companieswon the JIPM Excellence award.Exports The industry has been exporting around 13% of its output. In the year 2009-10, industry has exported US$ 3.8 billion. Principal export items include replacement parts, tractor parts, motorcycle parts, piston rings, gaskets, engine valves, fuel pump nozzles, fuel injection parts, filter & filter elements, radiators, gears, leaf springs, brake assemblies & bearings, clutch facings, head lamps, auto bulbs & halogen bulbs, spark plugs and body parts. PROFILE OF HI-TECH ARAI PVT LTD MADURAI Hi-Tech Arai Ltd is a Madurai based oil seals and automobile components manufacturingcompany. Having joint venture with Arai Seisakusho co Ltd Japan and Mitsubishi Corporation,Japan. The company previously called as Hi-Tech ancillaries‟ ltd after joint venture with AraiSeisakusho co ltd, the company name has changed to Hi-tech Arai ltd. The company wasestablished to produce rubber components and oil seals for the world famous companies‟likeMaruti Suzuki, Bajaj, TVS, Honda, Yamaha, Toyota, etc. The company was founded byMr.R.Lakshmi Narayanan, with the capital of Rs.4.5 lakhs and with the manpower of 75 as afamily owned concern. Mr. B.T.Bangera and Mr.R.Lakshmi Narayanan both were the ex-employees of Fenner (India) ltd. Their good relationship made them to form this great venture in1985. Later the company entered into technical collaborations with m/s Mitsubishi Japan andwith Arai Seisakusho ltd
  6. 6. Japan for manufacture of oil seals, O-rings, reed valves, molded rubber product, valves stemseals etc in1987. The percentage of collaboration is 88.84% for Arai Seisakusho Ltd and14.29%for Mitsubishi Corporation.Growing and achieving excellence through people is the motive of the organization. The corebelief is that it is possible to achieve zero defects and achieve leadership in the market. Thecompany also owns 23 wind mills each with the capacity of producing 11 MW power. Hi-TechArai is the only manufacturer of reed valves in India. I-Tech Arai is controlled by 9 boards ofdirectors. Among them  3 Promoter Directors  5 Directors from Arai Seisakusho Ltd  1 Director form Mitsubishi CorporationMISSION:To produce high quality products  At competitive prices  Combined with on-time delivery  Strictly adopting environmental friendly processes.VISION:  1993: Market leader in the country in 5 years  1997: One of the top 3 in the world and in the field of Oil Seals  2007: To become the preferred supplier of all customers  2010: Aims to touch 400 corore turn over by overtaking the past one of 294 corore
  7. 7. QUALITY & ENVIRONMENTAL POLICY Strive for continual improvement of our quality performance by meeting the changingrequirements of our customers and our environmental performance by prevention of pollutionand maintenance of wastes. Manufactures high quality products at competitive prices by adhering to thesystem, processes and procedures and continually improving the same. Promote energy savings and conservation of resources. Comply with all applicable legislative, regulation and other requirementsincluding those that apply to environmental aspects governing our activities. Achieve the above by creating awareness among our employees throughproper training and providing conductive work environment.MILESTONES: 1985: Hi-Tech Ancillaries was registered. 1986: First unit in Tanakkankulam was started. 1987: Technical collaboration with Arai Seisakusho Company Ltd, Japan. 1990: Totally professionalized. 1991: Second unit in Trichy was started. 1991: Awarded best SSI unit in the District. 1992: Awarded best SSI unit in the State. 1993: Third unit in K Pudur was started. 1994: Joint venture with Arai Seisakusho & Mitsubishi Corporation, Japan.
  8. 8. 1994: Hi-Tech Ancillaries changed to Hi-Tech Arai Ltd. 1995: New compounding unit in Kappalur. 1995: Fourth unit in K Pudur. 1997: Fifth unit in K Pudur (dedicated to MUL) 1999: Most modern factory at K Pudur. 2000: Won 1stprize on quality circle convention at state level & regional Level. 2000: Madurai jasmine quality circle (National level) 2000: Initiation of Environment Management System certification Program &obtained the certification in July 2001: White rose quality control won1st prize in state level & national Level. 2001: Quality award from Lucas TVS Ltd. 2002: Award from Keihin Lie Ltd Pune for cost optimization. 2003: Awarded best SSI unit in the State Level. 2003: The Company was accredited ISO 9001:2000 Certification 2005: CII & APAC awarded ³Best Industry practicing the HIV/AIDS Prevention´ for its Aids prevention and control project. 2006: First Export order from China. 2008: Received ISO TS-16949:2002. 2010: Himalaya quality circle of Hi-Tech Arai ltd won the ³Par Excellence Award´ in the national convention on quality concepts-2010held at Visakhapatnam.Company products:  Oil seal  „O‟ Rings  Reed valve Assembly  Joint carburetor  Moulded Rubber Products
  9. 9. PROFILE OF PRODUCTS a) Oil Seal: - Oil seal is a micro precision product. - Oil seals are especially meant for preventing oil leakage particularly in two wheelers & four wheelers like wheel hubs, front fork, transmission, and gear shift arm etc., - Failure of oil seal in engine parts may lead to a serious damage to the vehicle. b) O Rings: - Circular products having round cross-section or any customers
  10. 10. specified sectional from which just fits in assemblies (pumps, carburetors etc) to avoid or stop leakage of fluid gas from the system.c) Reed Valve Assembly:- Reed valve assembly is used in all modern two stroke engines as a device to control over air fuel mixture sent into the engine combustion chamber.- It is used for fuel efficiency and optimum output.- Reed valve assembly ensure complete combustion of fuel inside the engine combustion chamber for avoiding emission of unburned gases thereby contributing towards pollution control.c) Join carburetor:
  11. 11. • It is a device that blends air and fuel for an internal combustion engine• The carburetor works on Bernoullis principle: the faster air moves, the lower its static pressure, and the higher its dynamic pressure.d) Moulded Rubber Products:- Moulded rubber products are the products developed to suit the specifications and design of customers, so as to meet the exact working conditions of particular model of vehicles.- Usually the moulded rubber products reduce the noise, stroke vibrations and protect certain other components from dust, water, oil etc.- The company is the single source of supply for moulded products throughout the country.
  12. 12. COMPETITORS OF HI-TECH ARAI: o Fenner India o C.R. Seals o Sigma Freudenburg NOK Seals.
  13. 13. CHAPTER 2 INTRODUCTION TO FINANCIAL PERFORMANCE ANALYSIS The performance of the firm can be measured by its financial results, i.e., by its size ofearnings Riskiness and profitability are two major factors which jointly determine the value ofthe concern. Financial decisions which increase risks will decrease the value of the firm and onthe other hand, financial decisions which increase the profitability will increase value of the firm.Risk and profitability are two essential ingredients of a business concern. There has been aconsiderable debate about the ultimate objective of firm performance, whether it is profitmaximization or wealth maximization. It is observed that while considering the firmperformance, the profit and wealth maximization are linked and are effected by one-another. Acompany‟s financial performance therefore is normally judged by a series of ratios or figures,however there are following three ratio parameters which can be used to evaluate financialperformance, they are: a) Return on Equity b) Earnings Per Share and c) Price Earnings Ratio. All three parameters are discussed in detailed along with various other ratios. However, itis to be noted that fundamentally, the balance sheet indicates the financial position of thecompany as on that point of time. However, profit and loss account is a statement, which isprepared for a particular financial year. In Indian context, where an analyst has to rely upon theaudited financial statement for a particular company, the performance is to be judged from thefinancial statement only. This chapter, however indicates some of the techniques, which can beused for such analysis of financial performance.
  14. 14. INVESTMENTS IN INDUSTRYForeign Investments:  India enjoys a cost advantage with respect to casting and forging asmanufacturing costs in India are 25 to 30 per cent lower than their western counterparts. Seeingthe growing popularity of India in the automotive component sector, the InvestmentCommission has set a target of attracting foreign investment worth US$ 5 billion for the nextseven years to increase India‟s share in the global auto components market from the existing 0.9per cent to 2.5 per cent by 2015.  French type major, Michelin, has gained clearance from the Foreign InvestmentPromotion Board (FIPB) for its US$2.26 billion foreign direct investment (FDI) proposal to setup a manufacturing facility in Tamil Nadu.  Ford motor car is investing about 500$ million (Rs. 2,445 crores) to doublecapacity at its India plant, which will become a strategic global production hub.  Bosch will continue to maintain its focus in India in spite of global recession as itis planning to set up manufacturing units for electronic control units (ECU) by investing US$26.76 million.  Renault in association with Nissan is to source USD 440 million worth of autocomponents from India in the coming years.  Italian car manufacturer Fiat is planning to increase sourcing to USD 330 millionby 2010 and make India its global sourcing center.  Volkswagen has set target to capture 8-10 percent of market share in thepassenger car segment in India by 2014with a series of launches and by doubling the number ofdealers.
  15. 15. Domestic Investments  The market is so large and diverse that a large number of players can be absorbedto accommodate buyer needs. The sector not only has global players looking to invest andexpand but leading domestic component companies are also pumping in huge sums intoexpanding operations. Indian tyremakers are rolling out investment plans worth US$ 1.24billion, due to the rising popularity of radial tyres in the commercial vehicles segment. Someother investments include:  Hero Motors will invest US$ 19.84 million in association with Austrian firm BRPPower train for manufacturing automotive transmissions in India.  Indian arm of Swedish automotive component maker SKF is investing US$ 30million in a new ball bearings manufacturing plant at Haridwar.  Mahindra & Mahindra will invest approx US$ 400 million for setting up anintegrated auto facility in Tiruvannamalai (Chennai).  An auto park is coming up near Hyderabad with investments worth over US$409.30 million from around 34automotive ancillary units. Lower labour costs give Indian autoancillary companies an absolute cost advantage. ACMA numbers suggest that wage costaccounts for 3% to 15% of revenues for Indian manufacturers as compared to 20% to 40% forUS players. Historically, India‟s strength in exports lies in forgings, castings and plastics. Butthis is changing with more component manufactures investing in up gradation of technology inrecent years.
  16. 16. INDUSTRY TURNOVER The Indian organized auto ancillary industry revenue grew 6% yoy to INR720bn inFY09. Exports increased by 6% yoy to INR150bn. The recent financial performance of autoancillary companies with a greater reliance on OEMs and exports has been inferior to those witha larger focus on the replacement market. Yet, replacement stocks haveunderperformed.Despitethe recent rise in commodity prices, the average price for FY10f to be lower yoy. Thiswould provide little benefit to theOEM dependent stocks, while the stronger INR is likely to hurtexports.Replacement stocks are likely to retain the savings from decreased material prices and arisingINR. Profitability may improve for both groups, but replacement stocks are more likely tooutperform over the medium term as the market appreciates their stronger position.
  17. 17. CHAPTER 3 ACCOUNTS DEPARTMENT In British English included United Kingdom company law, financial statements are oftenreferred to as accounts although the term financial statement is also used, particularly byaccounts. The accounts department records, processes and maintains various financial aspectsand activities of the organization. This department is headed by Senior Manager,Mr.Lakshmanan. Financial statement provides an overview of a business financial condition inboth short and long term. There are four basic financial statements  Balance sheet.  Income statement.  Statement of retained earnings.  Statement of cash flows.The major functions are as follows. Accounts Receivables. Accounts Payables. Purchase Accounting. Sales Accounting. General Accounting. Fixed Assets Register. Activity Base Costing. All general cash flow movements. Maintaining cash flow movements in both Purchase and Sales. Deciding mode of payments. Capitalization, Machinery accounts progress. Processing of Sales Tax & Excise Duty.
  18. 18. Filing of Quarterly TDS returns. Processing Salary & Labour contract accounts.In HI- TECH ARAI they are following three main function is  General accounts.  Purchase accounts.  Sales accounts.1. General Accounts:The main functions of general accounts is Accounts receivabl Accounts payable In general accounting they have the details about insurance, E.B, petty cash, allocation &reimbursement of petty expenses also made. Functions:  Cash flow statement  Taxation  Final account
  19. 19. PURCHASE DEPARTMENT: Based on the terms and conditions specified by the suppliers in the voucher, the payments are cleared by the accounting department by issuing cheque for the specified dates. Function: To purchase the raw material in two ways 1. Indigenous purchase 2. Import purchase1. Indigenous Purchase: These items are purchased within India. Vendor payment is done 2 times per month & 30to 40 days of credit period is given for purchased materials.2. Import Purchase: In HI- TECH ARAI more than 70% raw materials used for production are imported andfor that credit period given to Mitsubishi Corporation is 4 to 6 months, payment is made onweekly basis.Import Suppliers: Arai Mitsubishi Japan Singapore
  20. 20. GermanPurchase Order: Before purchase the raw material they give quotation or analyze the supplier (i.e.)their quality, quantity, price, timely delivery based on that they give the order to purchase.Goods Received Notes (GRN): First they verify the delivery Chalan. If the raw materials are entered the industry, thenthey have to entered the details of the raw material to the goods received note. The HI-TECHARAI pays the payment for the importers through the bank only.Tax Details for Import as well as Indigenous purchase: BED (Basic Excise Duty) VAT (Value Added Tax) Based on the quantity of the Material/Product 8% Based on the Value of the Material/Product 10% Educational Cess 2% Higher Educational Cess 1% 3. Sales Account: Original equipment sales Raw material sales
  21. 21. Export sales Export oriented sales The 92% of sales done through OE market. For sales 30-45 dayswere given as credit period. They export only 2 % of total production; the turnover of exportedmaterials comes to 70 to 80 lacks per year. They also update the payment cheque received fromsales department Their one of the major function is receiving order & schedules it. They alsofind whether the payment is made or not and also handle the pending bills.1.Original Equipment Sales: According to the requisition (drawing) of the customer the HI- TECH ARAI companydesign and produce the goods.2. Raw Material Sales: To replace the sales against the dealers. The dealers only responsible for the payment.3. Export Sales: They export their product to other countries. Ex: Japan, Indonesia, China for exportingitems no need to pay any customs duty.
  22. 22. CHAPTER-4 MARKETING DEPARTMENTPurchase Department: Purchasing refers to a business organization attempting to acquire goods or service toaccomplish the goals of the enterprise. Through there are several organizations that attempt to setstandards in the purchasing process. Processes can vary greatly between organizations. Typicallythe word ³PURCHASING´ is not used inter changeably with the word ³PROCUREMENT´sinceprocurement typically include expediting, supplier quality, traffic and logistic (T&C) in additionto purchasing.Functions: - Identify the needs and wants. - Select the suppliers. - Place the order.Activity:There are two types of purchase activity. - Centralized Purchase Activity - Decentralized Purchase Activity
  23. 23. Kinds Of Purchase: o The purchase unit is a centralized unit responsible for the purchase of all materials required for production. The purchase can be classified into 4 categories based on nature of purchase. - Indigenous - Purchase of locally made material - Imports - Import of required material - Engineering Purchase - Purchase of machinery - Packing Material Purchase - Purchase of material required for Packing.Raw Material Purchase: The company is very keen that all the raw material should be purchased from approvedsuppliers. The detailed steps involved in Raw Material Purchase are as follows Based on the Sales forecast of the current financial year the quantity of sales is arrived and it is converted into compound and compound is converted into raw material thus theraw material requirement for the year is arrived.
  24. 24. Raw material requirement will be compared with the existing stock position at stores. Compounding & Respective production Units and also at bounded ware houses at Chennai (Imported items). Minimum ordering quantity and period is arrived by ABC analysis hand currently they have the following purchase schedule. Type of purchase/ A B C Class Imports 1.5M 4M 6M Indigenous 10D 1M 3MA - Goods having around 80% in terms of value.B - Goods having around 15% in terms of value.C - Goods having around 05%in terms of value.D - Days.M - Months.
  25. 25. - After considering the stock % the actual requirement for the month, enquiry for required materials will be sent to suppliers. - Quotations received from the suppliers will be compared in respect of the price charged, Lead time, quality & the credit period offered. - Sample lots are ordered & on approval from the Quality Assurance Department the source is finalized. - After finalizing the source confirmed Bulk purchase order will be issued to the supplier with the indication of delivery schedules. - Regular follow up for getting the material will be made based on the emergencies. - Materials required for development purpose (Small Quantity) will be procured based on the indents by the Technical Centre.Other Major Functions: Obtaining purchase indent from every unit. Scheduling purchase. Selection of suppliers based on quality & quantity Marketing. Cost estimation & Negotiation. Allotment of scheduled order to supplier. Decision of Mode of Transport. Receiving & Dispersion goods to required units. Vendor development activities. Cost saving at sources.
  26. 26. SALES DEPARTMENT: The Sales Department is classified into two based on the nature of customer they handle.They are Original Equipment (OE) Sale & Replacement Marketing (RM) Sales.1. OE Sales The major part of the turnover (around 90%) is through OE market. The company getsinto a legal binding with OE customers (new product) which states that the parts supplied to OEshould not be released in the replacement market for the next 2-3years, etc. and the majorcustomers are.  Hero Honda  Maruti Udyog Ltd.  Bajaj Group  TVS Motor  Endurance2. RM Sales The Replacement Marketing Sales is done to the retail end Customers and is headed byMr.C.V.Chidambaram, Manager, RM sales;this is done through authorized regional distributors. This department runs the business incomplete cash and carry method. The packing & dispatch activities of the RM sale is donethrough a depot. This RM Sales department has been recently shifted to Kappalur Unit. Othermajor customers are: Piagio (Italy)
  27. 27. Indore (France)Ashok Leyland LimitedBirla Yamaha(Japan, India)Automotives Axles LtdEscort LtdGabriel India Ltd
  28. 28. CHAPTER 5 HUMAN RESOURCE DEPARTMENT The HR department is headed by Mr. N. Sankaravelayudham, DGMHR, controls andmonitors the processes involving the human resource related activities throughout theorganization. HR activities include:  Recruitment and training for new employees.  Allocation of employees for various departments and units.  Process any employee related problem.  Employee performance management.  Culture Building.  Formulating Organizational Strategy.  Library maintenance.  Promote learning circles.  Maintain audit and process employee related data like attendance, salary and other specific functions related to HR management.Man Power Planning: There are two types of man power involved in the Company they are,  Company Staff  Contract Labor In both the cases the man power request is made by the concerned UNIT HEAD and theHRD HEAD would sanction the same with the approval of the Managing Director. For contract
  29. 29. labour the interview is made by the unit persons but for the company staff in addition to unitpersons the head office persons will also conduct interview. One important aspect is that thecompany would give preference to the people who are approaching with the reference of theexisting employees. The company started its operations with manpower of around 75 and now ithas manpower of around 1000.Training Measures: The first and the fore most of the Training measures are to identify the training needs ofthe employees in systematic manner and provide relevant training. The same is done in thefollowing method. Training requirements are identified with performance appraisal form. Training need of the operators is identifies by the supervisors. List of required training is received by the HRD from various sources. Training Budget is made by HRD and is approved by the MD. Then Training Schedule is prepared. List of Internal & External faculties is maintained by the HRD and is approved by the MD.
  30. 30. All the employees of the company should attend at least 32 hours of training program in a year. In case a particular employee is not able to attend the given schedule of training an alternate schedule would be given. On completion of the training program Training Feed Back Questionnaire is circulated to arrive at various decisions regarding the next training program. Training evaluation questionnaire is made to assess the impact on the employees and it is filed in the employees‟ personal file and is maintained till their presence in the organization.HRD measures: 1. HRD Practices:  Team Building.  Transparency in decision making  Developing Leadership.  Facilitating Team Work.  Counseling for Addicts.
  31. 31. 2.Culture Building:  Transparency.  Change in attitude toward the self & work to unfold the inner potentials.  Committed work force.  More emphasis on team work to get maximum outputs.  Own the whole family.3. Welfare Measures:  Twice Coffee or Tea is provided to their workers in each shift but in summer additionally buttermilk is provided.  Two uniforms per year for each confirmed workers.  In case of family planning operation Rs 500 is provided.  Two soaps to be provide for workers  Accident compensation is provided.  Conducting sports & games program once in a year.  Forming quality circles for their workers & providing counseling to their familymembers.  Sudden visit by the MD to the production units to know the workers grievances.
  32. 32. 4. Quality Circle:  Its main function is to facilitate Process Control, Mutual & Self Development of Employees, Improvement of their Workplace & Productivity by full participation of allmembers. QC is conducted regularly once in a week and they will conduct this meeting.  To contribute to the improvement and development of the organization.  To respect humanity and to build worthwhile lives and cheerful work areas.  To give fullest recognition to human capabilities and to draw out each individual‟s finite potential.SWOT Analysis: 1. Strength:  This company is the Indian Market Leader in oil seal manufacturing.  The company has a very good reputation for its products.  The company has a very good internal customer satisfaction.  Japanese technological collaboration is the biggest strength of the company.
  33. 33. 2. Weakness:  In case of shell manufacturing around 50 to 60 percent of the input (steel) wasted.  In case of moulding the company wastes around 30 to 40  percent of the rubber compound which is an imported one. 2. Opportunities:  The company can become the World Market Leader in the near future.  The rubber waste can be converted into a motor belt with slight modifications inthe mould design.4. Threats:  There is very less promotion opportunity for the operations people.  The starting pay package offered is very low.  Still the company has not entered into new projects to expand by diversification.
  34. 34. CHAPTER 5 SYSTEMS DEPARTMENTEDP/ ERP department: The Electronic Data Processing (EDP) department handles all activities regardingHardware and software throughout the organization. The Enterprise Resource Planning (ERP)unit is responsible for coordinating various departments and plants like Purchasing, DiscreteManufacturing, Inventory, Finance & Order Management and the technical highlights are as follows. Main functions of ERP: Software development and maintenance. Procurement of hardware and breakdown services.
  35. 35. System management including allocation of memory and providing access. File maintenance. Virus protection, system crash etc. Back-up services. Purchase of computer related consumer goods. Other functions of ERP:  Working towards profit.  Ensure cost saving from scratch through ABC analysis (activity based costing)Internet and Intranet: Department has both internet and intranet facility. Limited control is imposed on access. Transparency is ensured.
  36. 36. Development Center:The DC is the most important unit in the organization under the direct administrationof the Chairman. To monitor all progress & process in all the units of the organization To act as a window to customer. Development of new products. Customer supportive marketing Solving customer related queries. To monitor purchase, manufacturing, sales & dispatch activities. To maintain the quality state of the organization DC is divided into four main sections.They are Arai Communication Drawing Section Material Section Marketing Section
  37. 37. 1) Arai Communication:This section is solely responsible for communication activities with Arai SeisakushoLtd. The communication regarding Design, Engineering & Technology of the mouldsand moulding processes are done by this department.2)Drawing Section:This section is solely responsible for drafting various design regarding theproductmould and maintaining the same. It is also responsible for recordingengineering changeover activities. OE Drawing. Arai Drawing. Internal Production Drawing. Shell Drawing. Profile Drawing. Customer Reference Drawing. Spring Drawing. A3 Drawing.
  38. 38. 3) Material Section:This section handles all the material related aspects related to theManufacturingdepartment. The term material means the Compound (Rubber) used formanufacturingthe end product. Its main functions are as follows. Deciding the compound for manufacturing. Analysis of compound used for manufacturing. Analysis of sample products. Inspection of quality at all stages. Auditing test reports of compound used for producing end products4) Marketing Section:This section headed by DGM marketing & manager customer support controls allthemarketing activities of the organization. This section handles all thecustomer oriented activities too. The functions of this Department can be described asfollows: Receiving enquiry from customer end. Analysis of enquiry and related data. Feasibility Study.
  39. 39. Quotation preparation. Receiving purchase order from customer end. Ordering mould. Sample submission to customer with related documents. Receiving customer end report. Initiate mass production based on customer reportEXCISE DEPARTMENTExcise can be defined as an indirect tax imposed and levied by the CentralGovernmentof India. It is under the control of Central Board of Excise& Customs (CBEC).Any goods purchased, manufactured, and sold excise toward theCBEC.Functions: Calculating and maintaining the excise duty. To file the excise return documents yearly. To support the periodic audit done by authorities.
  40. 40. The Excise department act in co-ordination with all the other departments in thematter of excise duties.ENGINEERING DEPARTMENTEngineering department is the only department responsible for engineeringmaintenanceactivities in the organization.This is done on the basis of Breakdown maintenance Preventive maintenance Predictive maintenanceFunctions: Solving maintenance problems. Machine installation, design and production of required spares, jigs & fixtures. Spare maintenance and fabrication of required parts. New plant development.QUALITY MANAGEMENT DEPARTMENTThis department checks the quality and quantity of the raw material. TheQADepartment is responsible for validation, problem solving & maintaining the
  41. 41. quality aspects of the products and processes. This department is controlled by SGMTechnical and SM qualityassurance. Major functions are. Inspection of Moulds, raw materials and finished goods. Technical specification validation. Statistical process control. Issuing & auditing of various parameters.The general processes of quality assurance department are as follows. Input inspection shells Input inspection springs Technical specification validation Re-Validation Moulding process sheet Metal treatment process sheet Calibration
  42. 42. Quality & Environmental Policy Strive for continual improvement of our quality performance by meetingthe changing requirements of our customers and our environmental performance by prevention of pollution and maintenance of wastes. Manufactures high quality products at competitive prices by adhering to thesystem, processes and procedures and continually improving the same. Promote energy savings and conservation of resourcesStrategiesThe Organization strives to excel by strictly adopting the following aspects.Growingand achieving through people, by Training, Bench Marking, EmployeeInvolvement,Employee Empowerment, Root Cause Corrective Action, Team Work,Universal Responsibility,Statistical Thinking, Organizational Culture Building &Sustained Management Methods.
  43. 43. Quality Excellence is achieved by adopting the two major strategy:Kaizen Kaizen is a Japanese word meaning „Change for better‟ or „Improvement‟ . The common English usage is ´Continual improvement´. Kaizen refers to a work place Quality strategy and related to various quality control systems. Kaizen aims to eliminate waste. This often followed by standardization of this better way with others through standardized work.
  44. 44. CHAPTER 6 5s Quality Principle5S is a method of organizing a workplace and keeping it organized. The 5S are,SEIRI Sort and dispose unwanted items. Follow red tag system. Fixed point photograph. Standard for deciding the required things.SEITON Organizing. Proper lay out. Tools shadow board cupboard/ racks. Proper arrangements. Filing in cabinet.
  45. 45. SEISO Cleaning. Set time for cleaning and checking standard. Development cleaning and checking standard. Follow standards.SEIKETSU Standardizing. Develop check list and display. Position mark. Jewellery box system. Visual control.SHITSUKE Training and discipline Train men at all level Planned audit
  46. 46. Motivation by recognition .The above mentioned quality aspects are being followed throughout the organization to uphold its quality. These are followed by its employees as ³their way of life´.Quality Circle:Quality Circle is a small group of 6 to12 employees doing similar work,whovoluntarily meet together on a regular basis to identify improvements in theirrespective work areas using proven techniques for analyzing and solving work relatedproblems coming in theway of achieving and sustaining excellence leading to mutualupliftment of employees as well asthe organization.It is ³a way of capturing thecreative and innovative power that lies within thework force´.The modern concept of quality control is designed in such a manner that,employeesof an organization have the opportunity to perform effectively and mesh well withthe plan and activities of the management, thereby facilitating a very conducive workenvironment.
  47. 47. Certifications:The company has got the following certifications. For Quality management systemo ISO 9001:2000o ISOTS 16949:2002o For Environment management system ISO 14001:2004

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