A REPORT ON

ORGANIZATIONAL STUDY

AT

KERALA STATE GOVERNMENT ELECTRONICS DEVELOPMENT

CO-ORPORATION LTD. (KELTRON)

KELTRON EQUIPMENT COMPLEX (KEC), KARAKULAM

A training report submitted in partial fulfillment of the requirement for

the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted

By

ABILASH AJITHAN

(Reg No: )

May 2015

DEPARTMENT OF MANAGEMENT STUDIES

SREE NARAYANA GURUKULAM COLLEGE OF
ENGINEERING
(Affiliated to M G University & Approved by A.I.C.T.E, New Delhi)
KADAYIRUPPU, KOLENCHERY, ERNAKULAM, KERALA

1
 DECLARATION

I do here by declare that this report on organizational study at KELTRON EQUIPMENT

COMPLEX (KEC), KARAKULAM which belongs to KELTRON group of companies is
submitted to Mahatma Gandhi University, Kottayam in partial fulfillment of the requirement for the
award of the degree of Master Of Business Administration as a bonafide record of summer
internship training undergone by me in the firm and prepared under the guidance of Prof. Soumya,
Department of Management Studies, Sree Narayana Gurukulam College of Engineering
Kadayiruppu, Kolencheri

ABILASH AJITHAN

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 ACKNOWLEDGEMENT

At the outset, I thank God Almighty for his blessing throughout the study and for
making it possible for me to complete the organizational study within the stipulated time.

I would like to express my heartfelt gratitude to Prof. (Dr) Saji C B, Principal, Sree
Narayana Gurukulam College of Engineering Kadayiruppu, Kolenchery and Prof. (Dr)
Kemthose P Paul, Head of the Department, Department of Management Studies, Sree
Narayana Gurukulam College of Engineering Kadayiruppu, and Kolenchery for permitting
me to undergo this internship training at KELTRON EQUIPMENT COMPLEX (KEC),
KARAKULAM (KELTRON)

I am extremely thankful to Prof. Soumya, Department of Management Studies, who gave

me guidance and suggestion for the preparation of this organizational study report. I extend
my thanks to all faculty members of the Department, for their help and encouragement.

I wish to express my gratitude to HR MANGER,KELTRON EQUIPMENT

COMPLEX (KEC), KARAKULAMfor granting permission and rendering wholehearted
support throughout the internship training in the company. Also I express my thanks to,
Marketing Manager and All Staffs ofKELTRON EQUIPMENT COMPLEX (KEC), or
KELTRON, who provided information and resources.

ABILASH AJITHAN

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chapter Particulars Page
No:
EXECUTIVESUMMARY 6
1 INTRODUCTION
1.1 Introduction 7
1.2 Objectives of Study 9
1.3 Methodology 9
1.4 Scope of the study 10
1.5 Chapterisation 10
THEORATICAL BACKGRUOND
2.0 Concept of Organizing 11
2.3 Organisational structure 14
2.4 Departmentalization 29
2.5 Authority and Delegation of Authority 30
2.6 Centralization And Decentralization 32

3.0 INDUSTRIAL PROFILE 33

3.1 International Scenario 33
3.2 National Scenario 38
3.3 State Scenario 42
4.0 COMPANY PROFILE 43
4.1 History of the Company 43
4.2 Objectives of the Company 44
4.3 Vision 44
4.4 Mission 45
4.6 Product Profile 46
4.7 Awards and Milestones 52

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4.8 Functional Departments 53
4.9 Growth profile 78
4.10 Future Plans 78
5.0 SWOT analysis 80
5.1 SWOT analysis 80
FINDINGS 83
SUGGESTIONS 84
CONCLUSION 85
BIBLIOGRAPHY 86

LIST OF FIGURES

Sl No: Title of Figures Page

No.
2.2.3 Process of Organization 12
2.3 Organization chart 16
2.3.1.1 Line Structure 17
2.3.1.2 Line and Staff Organization 19
2.3.1.3 Functional Structure 21
2.3.1.4 Project Structure 23
2.3.1.5 Matrix Structure 25
2.3.1.6 Divisional Structure 27
2.4.1 Types of Departmentation 29
Organisation Structure 50
Five Strategic Business Units 51
4.8.1 Production Department 54

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4.8.3 Personnel Department 60
4.8.4 Finance Department 65
4.8.6 Purchase Department 71

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 EXECUTIVESUMMARY

An efficient organization is essential for the success of a business enterprise. The

defining of duties and fixing responsibilities of all employees in the organization is
essential. An effective organization system ensures proper supervision and control.
Organization is the mechanism which determines the relationship of various persons.
With the help of a well-defined management is able to perform the functions of
direction, co-ordination and control. An ill-defined organization plan will not enable
the management to make an effective exhibition of its managerial talents to realize
business goals. An organizational study was conducted in KELTRON EQUIPMENT
COMPLEX (KEC), KARAKULAM Thiruvananthapuram to know the real functioning of an
organization.
In this study primary and secondary data were the main sources of information. Here
the primary data are collected through an interview method with the managers of the
concerned department. Then interactions with the staffs were done in order to collect
data regarding the working. Secondary data are collected from websites, newspaper,
and magazines.

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1.1 Introduction

In this technology driven era, knowledge is not just about studying the
theoretical aspects, but also understanding the practical views and implementing it. Industrial
training program aims to achieve industrial exposure and practical skills.

The training program was conducted at KELTRON EQUIPMENT COMPLEX

(KEC), KARAKULAM. This industry belongs to Keltron group of companies, a Government
undertaking company situated at Karakulam which is 14 kms away from
Thiruvananthapuram city, is definitely a leader in the electronic goods industry. The products
they manufactured are mainly for government companies, Indian Navy, government
departments and many other private companies.

The company has been certified ISO 9001-2008 for design, manufacture and
supply of electronic systems.

Keltron Equipment Complex

Keltron, Kerala State Electronics Development Corporation Limited, is a public sector

Electronics Company located in Kerala. It is headquartered at the capital city of Kerala,
Thiruvananthapuram. The company is under the direct control of the State Government of
Kerala. The registered name of the company is Kerala State Electronics Development
Corporation Limited. The name Keltron was coined from two words, Kerala Electronics. This
organization study was conducted at Keltron Equipment Complex, Karakulam, and
Thiruvananthapuram. A study of the major functional areas was undertaken.

Keltron, a leading public sector under taking in Kerala has a history of 33 years creditable
achievements in the field of electronics. It has made tremendous strides in all fields of
electronics like power electronics, Networking, traffic management, mil grade equipments
and the like. It spearheaded an electronics revolution in India. Currently, major products of
the company include mines for Indian navy and various parts of Rockets for Indian Space
Research Organization (ISRO). The company also produces basic electronic components

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such as capacitors, transistors, resistors, diodes, PCBs on a large scale for the Indian market.
It also provides services in the field of information technology, animation, and web designing
It has recently established a division for geo- informatics services.Organization study gives a
better practical understanding of the functional aspects of the major departments in an
organization. The following report is a study of the functions, structure, procedures,
performance of Keltron Equipment Complex (KEC) and its goals and future plans studied
over a span of four weeks

1.2 Objectives of Study

1.2.1 Primary objective

1. To study the overall functions of the organization.

1.2.2 Secondary objectives

1. To study the hierarchical structure of the major departments.

2. To study the duties and responsibilities of key personnel
3. To conduct a SWOT analysis.
4. To observe the work culture of the employees
5. To study the scope of the organisation in the state and national level.
6. To know about the future plans of the organisation.

1.3 Methodology

Methods of Data Collection

The most integral part of the study was the data collection process. The data consist of
two types. It can be classified as primary data and secondary data.

Primary Data
Primary data are collected for the first time and are original in character. Here the
primary data are collected through an interview method with the managers of the

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 concerned department. Then interactions with the plant workers were done in order to
collect data regarding the processing of the plant.

Secondary Data

Secondary data are those which have already been collected by some other persons and
which are passed through the statistical machines at least once. Data are collected from
websites, newspaper, and magazines.

1.4Scope of the study

The organizational study is conducted at KELTRON EQUIPMENT COMPLEXwas aimed at
an attempt to understand the performance of different departments through the entire
organization structure. This organizational study was conducted to provide industrial
exposure to the trainee and to bridge the gap between theory and practical application of
various aspects regarding the organization. The study intended to attain a first-hand
experience of the overall running of an organization. A detailed analysis of each of the
activities performed by the departments is beyond the scope of the study. It also
provides a chance to see practical constraints faced by the managers while putting
theory into practice

1.5 Chapterisation

Chapter 1

The first chapter is the introductory chapter and includes the objectives of the study,
Methodology, Scope of study, and chapter scheme.

Chapter 2

The second chapter is about the theoretical background

Chapter 3

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The third chapter is about industrial profile. This chapter includes the world, Indian & state
scenario of the industry respectively.

Chapter 4

The fourth chapter is about the company profile and this includes history of the company
stating the objectives and developmental stages since inception, ownership status, capital
structure, and competitors of the organization. This chapter also includes departmental
details, each departments structure, functions, procedure, duties and responsibilities, policies
and programmes. The report ends with SWOT analysis and Conclusion.

Concept of Organizing

2.1 Organizing

Organizing plays a central role in the management process. Once plans are created the
manager's task is to see that they are carried out. Given a clear mission, core values,
objectives, and strategy, the role of organizing is to begin the process of implementation by
clarifying jobs and working relationships. It identifies who is to do what, who is in charge of
whom, and how different people and parts of the organization relate to and work with one
another. All of this, of course, can be done in different ways. The strategic leadership
challenge is to choose the best organizational form to fit the strategy and other situational
demands.

Organizing is the managerial function of arranging people and resources to work toward a
goal. The purposes of organizing include but are not limited to determining the tasks to be
performed in order to achieve objectives, dividing tasks into specific jobs, grouping jobs into
departments, specifying reporting and authority relationships, delegating the authority
necessary for task accomplishment, and allocating and deploying resources in a coordinated
fashion.

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2.2 Organization

Organization is the process of identifying and grouping work to be performed, defining

and delegating responsibility and authority and establishing relationship for the purpose of
enabling people to work most effectively together in accomplishing objective.

Basically, an organization in its simplest form (and not necessarily a legal entity, e.g.,
corporation or LLC) is a person or group of people intentionally organized to accomplish an
overall, common goal or set of goals. Business organizations can range in size from one
person to tens of thousands.

2.2.1 Principle of Organization

Principle of Unity of objective

Principle of Efficiency
Principle of Span of control
Principle of Scalar Principle
Principle of Delegation
Principle of Parity of Authority and Responsibility
Principle of Absolute Responsibility
Principle of Level of authority
Principle of Unity of command
Principle of Departmentation
Principle of Flexibility
Principle of Continuity
Principle of Leadership Facilitation

2.2.3 Process of Organization

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 Chart No: 1

2.2.3.1 Fixing the Objectives of the Organization

At the top level, administrative management first fixes the common objectives of
organisation. At the middle level, executive management fix the departmental objectives.
Lastly, at the lower level, supervisory management fix the day-to-day objectives. All the
objectives of the organisation must be specific and realistic.

2.2.3.2 Finding Activities Must For Achieving Objectives

After fixing the objectives, the top-level management prepares a list of different activities (or
works) which are required to be carried out for achieving these objectives. This list is
prepared at random without following any sequence or order. This is a very important step
because it helps to avoid duplication, overlapping and wastage of efforts.

2.2.3.3Grouping the similar activities

All similar or related activities having a common purpose are grouped together to make
departments. For e.g. all activities or works which are directly or indirectly connected with
purchasing are grouped together to make the Purchase Department. So various departments
such as Purchase, Production, Marketing, Finance, etc. are made. The grouping of similar
activities leads to division of labour and specialisation.

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2.2.3.4Defining responsibilities of each employee

The responsibilities (duties) of each employee are clearly defined. This will result in the
selection of a right person for the right post / job. He / she will know exactly what to do and
what not to do. Therefore, it will result in efficiency.

2.2.3.5Delegating authority to employees

Each employee is delegated (surrender or given) authority. Without authority, the employees
cannot carry out their responsibilities. Authority is the right to give orders and the power to
get obedience. The authority given to an employee should be equal to the responsibility given
to him.

2.2.3.6Defining authority relationship

When two or more persons work together for a common goal, it becomes necessary to clearly
define the authority relationship between them. Each person should know who is his
superiorfrom who he should take orders, and to whom he will be answerable. Similarly, each
superior should know what authority he has over his subordinates.

2.2.3.7Providing employees all required resources

After defining the authority relationships, the employees are provided with all the material
and financial resources, which are required for achieving the objectives of the organisation.
So in this step, the employees actually start working for a common goal.

2.2.3.8 Coordinating efforts of all to achieve goals

This is the last stage or step in the process of organisation. Here, the efforts of all the
individuals, groups, departments, etc. are brought together and co-coordinated towards the
common objectives of the organisation.

2.3Organizational Structure

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 It is the established pattern of relationship among components or parts of the
organization. It prescribes the relationship among various positions and activities in business.
Since various positions are held by persons so structure create relationship among them .The
organization structure provides a frame work which holds the various functions together in
accordance with the pattern determine by managers. A planned structure outlines the required
functions, correlates the functions in a systematic manner and assigns authority and
responsibility.

Every business sets some goals to be achieved. In order to achieve goals some activities are
to be performed. These activities are to be specified classified and grouped. The grouped
activities are assigned to individuals or groups. A system of proper co-ordination is
established to reach the organizational goals. The establishment of systematic relationship
among various activities and persons is the framework of the organization structure. There
may be problems and difficulties if the structure is faulty. The structure should be suitable to
the working of the organization and be helpful in achieving business goals.
Key Elements for Proper Organizational Structure

Work Specialization: To what degree are articles subdivided into separate jobs
Departmentalization: On what basis jobs will be grouped
Chain of Command: To whom will individuals and groups report
Span of Control: Up to how many individuals can a manager efficiently direct
Centralization vs Decentralization: Who will be the sole maker of decisions
Formalization: To what degree will there be rules and regulations to direct employees
and managers

Process and Structure of Organization

Organizing, like planning, must be a carefully worked out and applied process. This process
involves determining what work is needed to accomplish the goal, assigning those tasks to
individuals, and arranging those individuals in a decision-making framework (organizational
structure). The end result of the organizing process is an organization a whole consisting of
unified parts acting in harmony to execute tasks to achieve goals, both effectively and
efficiently

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 ORGANIZATION CHART

Board of Directors

General Manager

Marketing Manager Production Manager Personnel Manager

Supervisor Supervisor Supervisor Supervisor Supervisor Supervisor

Plant-1 Plant-2 Product-1 Product-2 Plant-1 Plant-2

Chart No:
2

A properly implemented organizing process should result in a work environment where all
team members are aware of their responsibilities. If the organizing process is not conducted
well, the results may yield confusion, frustration, loss of efficiency, and limited effectiveness.

2.3.1Types of Organization Structure

Line organizational structure

Line and staff organizational structure
Functional organizational structure
Project organizational structure
Divisional organizational structure
Matrix organizational structure

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2.3.1.1Line Structure

Chart No:3

Line organization is the simplest form of organization and is most common among small
companies. The authority is embedded in the hierarchical structure and it flows in a direct
line from the top of the managerial hierarchy down to different levels of managers and
subordinates and further down to the operative levels of workers. It clearly identifies
authority, responsibility and accountability at each level.

These relationships in the hierarchy connect the position and tasks of each level with those
above and below it. There is clear unity of command so that the person at each level is
reasonably independent of any other person at the same level and is responsible only to the
person above him. The line personnel are directly involved in achieving the objectives of the
company.

Because of the small size of the company, the line structure is simple and the authority and
responsibility are clear-cut, easily assignable and traceable. It is easy to develop a sense of
belonging to the organization, communicationis fast and easy and feedback from the
employees can be acted upon faster.

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The discipline among employees can be maintained easily and effective control can be easily
exercised. If the president and other superiors are benevolent in nature, then the employees
tend to consider the organization as a family and tend to be closer to each other that is highly
beneficial to the organization.

On the other hand, it is a rigid form of organization and there is a tendency for line authority
to become dictatorial that may be resented by the employees. Also, there is no provision for
specialists and specialization that is essential for growth and optimization and hence for
growing companies, pure line type of structure becomes ineffective.

The line organization can be a pure line type or departmental line type. In the pure line type
set-up, all similar activities are performed at any one level. Each group of activities is self-
contained and is independent of other units and is able to perform the assigned duties without
the assistance of others. In a departmental line type of organization, also known as functional
structure, the respective workers and supervisors are grouped on a functional basis such as
finance, production and marketing, and so on.

Merits

It is the simplest kind of organizational structure.

Strict authority results in a stronger discipline.

Prompt decisions result in quick and effective actions.

There is clarity in the structures of authority and responsibility.

As the control rests with one superior, it accords him the flexibility to adjust the

.department.

There are good career advancement prospects for individuals who deliver quality work.

Demerits

There are chances of the department head being biased.

Lack of specialization is a persistent problem.

The department head may be burdened with lots of work.

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Communication only happens from top to bottom.

Superiors with authority can misuse it for their benefit.

Decisions are taken by a single person and can go wrong

2.3.1.2 Line and Staff Organization

Chart No: 4

In this type of organization, the functional specialists are added to the line, thus giving the
line the advantages of specialists. This type of organization is most common in our business
economy and especially among large enterprises. Staff is basically advisory in nature and
usually does not possess and command authority over line mangers. The staff consists of two
types:

General Staff: This group has a general background that is usually similar to executives and
serves as assistants to top management. They are not specialists and generally have no

19
authority or responsibility of their own. They may be known as special assistants, assistant
managers or in a college setting as deputy chairpersons.

Specialized Staff: Unlike the general staff who generally assist only one line executive, the
specialized staff provides expert staff advice and service to all employees on a company wide
basis. This group has a specialized background in some functional area and it could serve in
any of the following capacities:

(a) Advisory Capacity: The primary purpose of this group is to render specialized advice and
assistance to management when needed. Some typical areas covered by advisory staff are
legal, public relationsand economic development.

(b) Service Capacity: This group provides a service that is useful to the organization as a
whole and not just to any specific division or function. An example would be the personnel
department serving the enterprise by procuring the needed personnel for all departments.
Other areas of service include research and development, purchasing, statistical analysis,
insurance problems and so on.

(c) Control Capacity: This group includes quality control staff who may have the authority to
control the quality and enforce standards.

The line and staff type of organization uses the expertise of specialists without diluting the
unity of command. With the advice of these specialists, the line managers also become more
scientific and tend to develop a sense of objective analysis of business problems. According
to Soltonstoff, a staff member may serve as a coach, diagnostician, policy planner,
coordinator, trainer, strategist, and so on.

The line and staff type of organization is widely used and is advantageous to the extent that
the specialized advice improves the quality of decisions resulting in operational economics.
Also, since line managers are generally occupied with their day-to-day current operations,
they do not have the time or the background for future planning and policy formulation. Staff
specialists are conceptually oriented towards looking ahead and have the time to do strategic
planning and analyze the possible effects of expected future events.

Its main disadvantages are the confusion and conflict that arises between line and staff, the
high cost that is associated with hiring specialists and the tendency of staff personnel to build

20
their own image and worth that is sometimes at the cost of undermining the authority and
responsibility of line executives.

Merits

It enables the employees to perform at a faster rate.

It helps employees to accept responsible jobs and specialize in a particular area.

It helps line managers to concentrate on the task at hand.

Little or no resistance is met when organizational changes take place.

It results in less operational wastage and increases productivity.

Employees feel that they are given the due credit for their contribution.

Demerits

Confusion may be created among employees.

Employees lack operational knowledge to give result-oriented suggestions.

There are too many levels of hierarchy.

Employees may have differences of opinions and this may slow down the work.

As staff specialists exist, it is costlier than a simple line organization.

Decision-making may be time-consuming.

2.3.1.3Functional Structure

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 Chart No: 5

A functional manager can make decisions and issue orders to the persons in divisions other
than his own, with a right to enforce his advice. Some good examples of specialists who have
been given functional authority in some organizations are in the areas of quality control,
safety and labour relations.

The functional organization features separate hierarchies for each function creating a larger
scale version of functional departments. Functional departmentalization is the basis for
grouping together jobs that relate to a single organizational function or specialized skill such
as marketing, finance, production, and so on. The chain of command in each function leads to
a functional head who in turn reports to the top manager.

The functional design enhances operational efficiency as well as improvement in the quality
of the product because of specialists being involved in each functional area and also because
resources are allocated by function rather than being duplicated or diffused throughout the
organization.

One of the main disadvantages of the functional design is that it encourages narrow
specialization rather than general management skills so that the functional managers are not

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well prepared for top executive positions. Also, functional units may be so concerned with
their own areas that they may be less responsive to overall organizational needs.

Merits

It has high degrees of specialization.

It has clear lines of authority.

It facilitates easy accountability for the work.

It accords a high level of speed and efficiency.

The need for duplication of work is eliminated.

All the functions command equal importance.

Demerits

Communication has several barriers which makes coordination difficult.

More focus is laid on individuals rather than the organization.

The decisions taken by a single person may not always work in favour of the organization.

As the organization expands, it gets difficult to exercise control on its operations.

There may be lack of teamwork between different departments or units.

As all the functions are separated, employees may not gain knowledge about other

.specializations

2.3.1.4Project Structure

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 Chart No: 6

These are temporary organizational structures formed for specific projects for a specific
period of time and once the goal is achieved, these are dismantled. For example, the goal of
an organization may be to develop a new automobile. For this project, the specialists from
different functional departments will be drawn to work together.

These functional departments are production, engineering, quality control marketing research,
etc. When the project is completed, these specialists go back to their respective duties. These
specialists are basically selected on the basis of task related skills and technical expertise
rather than decision-making experience or planning ability.

These structures are very useful when:

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 1. The project is clearly defined in terms of objectives to be achieved and the target date
for the completion of the project is set. An example would be the project of building a
new airport.
2. The project is separate and unique and not a part of the daily work routine of the
organization.
3. There must be different types of activities that require skills and specialization and
these must be coordinated to achieve the desired goal.
4. The project must be temporary in nature and not extend into other related projects.

Merits

Clear Line of Command

Autonomy
Quick Decision Making
Knowledge Sharing
Easier Supervision

2.3.1.5Matrix Structure

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 Chart No: 7

A matrix structure is, in a sense, a combination and interaction of project and functional
structures and is suggested to overcome the problems associated with project and functional
structures individually. The key features of a matrix structure are that the functional and
project lines of authority are super-imposed with each other and are shared by both functional
and project managers. The project managers are generally responsible for overall direction
and integration of activities and resources related to the project. They are responsible for
accomplishing work on schedule and within the prescribed budget. They are also responsible
for integrating the efforts of all functional managers to accomplish the project and directing
and evaluating project activity. The functional managers are concerned with the operational
aspects of the project. The functional structure is primarily responsible for:

1. Providing technical guidance for the project.

2. Providing functional staffs that are highly skilled and specialized.

3. Completing the project within prescribed technical specifications.

Greiner sees matrix organization, in which cross-functional teams are used, as a response to
growing complexity associated with the organizational growth. These complexities, both
internal(size, technology) as well as external (markets, competitors), create problems of
information processing and communication that are best dealt by matrix type of organization.

26
Matrix organizational design is most useful when there is pressure for shared resources. For
example, a company may need eight product groups, yet have the resources only to hire four
marketing specialists. The matrix provides a convenient way for the eight groups to share the
skills of the four specialists.

Each matrix contains three unique sets of role relationships: (1) the top manager or Chief
Executive Officer who is the head and balances the dual chains of command; (2) the
managers of functional and project (or product) departments who share subordinates; and (3)
the specialists who report to both the respective functional manager and project manager.

An important aspect of the matrix structure is that each person working on the project has two
supervisors the project manager and the functional manager

Merits

Employees are not attached to temporary staff or temporary work.

The functional manager controls the project.

The functional manager is responsible in case anything goes wrong.

The more the project manager communicates with the employees, the better are the

results.

The project manager can make things happen without being in control.

The decision-making rests in the hands of the functional manager.

Demerits

The project manager may face strong apathy from his workers.

The project manager does not have complete authority.

If not supervised, workers can reduce the productivity of the entire unit.

The project manager is a weak authority who has no control over the employees.

He has no control over workload management and task prioritization.

27
He cannot even give a performance review.

2.3.1.6Divisional Structure

Chart No: 8

The divisional or departmental organization involves grouping of people or activities with

similar characteristics into a single department or unit. Also known as self-contained
structures, these departments operate as if these were small organizations under a large
organizational umbrella, meeting divisional goals as prescribed by organizational policies and
plans.

The decisions are generally decentralized so that the departments guide their own activities.
This facilitates communication, coordination and control, thus contributing to the
organizational success. Also, because the units are independent and semi-autonomous, it
provides satisfaction to the manager that in turn improves efficiency and effectiveness.

This division and concentration of related activities into integrated units is categorized on the
following basis:

Departmentalization by Product. In this case, the units are formed according to the type of
product and it is more useful in multi-line corporations where product expansion and

28
diversification, and manufacturing and marketing characteristics of the product are of primary
concern. The general policies are decided upon by the top management within the
philosophical guidelines of the organization.

Departmentalization by Customers. This type of departmentalization is used by those

organizations that deal differently with different types of customers. Thus, the customers are
the key to the way the activities are grouped. Many banks have priority services for
customers who deposit a given amount of money with the bank for a given period of time.
Similarly, business customers get better attention in the banks than other individuals.

Departmentalization by Area. If an organization serves different geographical areas, the

division may be based upon geographical basis. Such divisions are especially useful for large
scale enterprises that are geographically spread out such as banking, insurance, chain
department stores or a product that is nationally distributed.

Departmentalization by Time. Hospitals and other public utility companies such as Telephone
Company that work around the clock are generally departmentalized on the basis of time
shifts. For example, the telephone company may have a day shift, on evening shift and a
night shift, and for each shift a different department may exist, even though they are all alike
in terms of objectives.

Merits

Units which are not working can be closed down easily.

Each unit can be operated and treated as a separate profit centre.

It accords rapid and easy decision-making.

It also gives a lot of independence to the decision makers.

Individual products get separate attention as per the problems they face.

It enables the organization to have a high productivity and efficiency quotient.

Demerits

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As each unit operates on its own, organizational goals may not be achieved.

Unhealthy competition may exist among internal business units.

As it has too many managerial levels, it may hamper the business.

Accounting work and taxes may increase considerably.

All the units may not be considered as equal.

Marketing individual products may add up to the cost significantly.

2.4 Departmentalization

First step in organizing process.

Departmentalization refers to the process of grouping activities into departments.

2.4.1 Types of Departmentation

There are basically five types of departmentation in organizations. The five types of
departmentation are: functional, product, customer, geographical and process.

Functional departmentation

Chart No: 9

Most companies practice functional departmentation. An example is the Production

department, HR department, Accounts department, Marketing department and IT department.

Product departmentation

When a company has a wide range of products, product departmentation is a logical choice.
For example, Kimberly Clark manufactures childrens products, toiletry and industrial

30
hygiene products. Each product cluster has its own manufacturing plant, research and
development, and marketing team.

Customer departmentation
When a company has different customer bases, customer departmentation allows better
customer servicing. A travel agency can have one team taking care of corporate customers,
and the other team taking care of walk-in retail customers.

Geographical departmentation
Geographical departmentation is good for a multi-national company. The company can hire
local employees to serve different customers from different geographical locations.

The different offices in different countries usually report to a regional headquarter. For
example, the regional headquarter for Asia is in Singapore, and the regional headquarter for
Europe is in London.

Process departmentation

Process departmentation is practiced in many factories with assembly line. The employees
are grouped into a team to take care of a specific process.

Conclusion to the five types of departmentation

Most companies employ a mixture of different departmentation types. It can be functional

departmentation with process departmentation. The important thing is that each employee
knows exactly where he or she fits in.

2.5 Authority and Delegation of Authority

2.5.1 Authority

In context of a business organization, authority can be defined as the power and right
of a person to use and allocate the resources efficiently, to take decisions and to give orders

31
so as to achieve the organizational objectives. Authority must be well- defined. All people
who have the authority should know what is the scope of their authority is and they shouldnt
mutualize it. Authority is the right to give commands, orders and get the things done. The top
level management has greatest authority. Authority always flows from top to bottom. It
explains how a superior gets work done from his subordinate by clearly explaining what is
expected of him and how he should go about it. Authority should be accompanied with an
equal amount of responsibility. Delegating the authority to someone else doesnt imply
escaping from accountability.

2.5.2 Delegation of authority

Delegation of authority is the base of superior-subordinate relationship, it involves following

steps:-

i. Assignment of Duties - The delegator first tries to define the task and duties to the
subordinate. He also has to define the result expected from the subordinates. Clarity
of duty as well as result expected has to be the first step in delegation.
ii. Granting of authority - Subdivision of authority takes place when a superior divides
and shares his authority with the subordinate. It is for this reason; every subordinate
should be given enough independence to carry the task given to him by his superiors.
The managers at all levels delegate authority and power which is attached to their job
positions. The subdivision of powers is very important to get effective results.
iii. Creating Responsibility and Accountability - The delegation process does not end
once powers are granted to the subordinates. They at the same time have to be
obligatory towards the duties assigned to them. Responsibility is said to be the factor
or obligation of an individual to carry out his duties in best of his ability as per the
directions of superior. Responsibility is very important. Therefore, it is that which
gives effectiveness to authority. At the same time, responsibility is absolute and
cannot be shifted. Accountability, on the others hand, is the obligation of the
individual to carry out his duties as per the standards of performance. Therefore, it is
said that authority is delegated, responsibility is created and accountability is
imposed. Accountability arises out of responsibility and responsibility arises out of
authority. Therefore, it becomes important that with every authority position an equal
and opposite responsibility should be attached.

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Therefore every manager, i.e., the delegator has to follow a system to finish up the delegation
process. Equally important is the delegates role which means his responsibility and
accountability is attached with the authority over to here.

2.6 Centralization And Decentralization

2.6.1 Centralization

It is said to be a process where the concentration of decision making is in a few

hands. All the important decision and actions at the lower level, all subjects and actions at the
lower level are subject to the approval of top management. According to Allen,
Centralization is the systematic and consistent reservation of authority at central points in
the organization. The implication of centralization can be :-
Reservation of decision making power at top level.
Reservation of operating authority with the middle level managers.
Reservation of operation at lower level at the directions of the top level.

Under centralization, the important and key decisions are taken by the top management
and the other levels are into implementations as per the directions of top level. For example,
in a business concern, the father & son being the owners decide about the important matters
and all the rest of functions like product, finance, marketing, personnel, are carried out by the
department heads and they have to act as per instruction and order of two people.

2.6.2 Decentralization

It is a systematic delegation of authority at all levels of management and in all of the

organization. In a decentralization concern, authority in retained by the top management for
taking major decisions and framing policies concerning the whole concern. Rest of the
authority may be delegated to the middle level and lower level of management.

The degree of centralization and decentralization will depend upon the amount of
authority delegated to the lowest level. According to Allen, Decentralization refers to the

33
systematic effort to delegate to the lowest level of authority except that which can be
controlled and exercised at central points.

Decentralization is not the same as delegation. In fact, decentralization is all extension of

delegation. Decentralization pattern is wider is scope and the authorities are diffused to the
lowest most level of management. Delegation of authority is a complete process and takes
place from one person to another. While decentralization is complete only when fullest
possible delegation has taken place. For example, the general manager of a company is
responsible for receiving the leave application for the whole of the concern. The general
manager delegates this work to the personnel manager who is now responsible for receiving
the leave applicants. In this situation delegation of authority has taken place. On the other
hand, on the request of the personnel manager, if the general manager delegates this power to
all the departmental heads at all level, in this situation decentralization has taken place. There
is a saying that Everything that increasing the role of subordinates is decentralization and
that decreases the role is centralization. Decentralization is wider in scope and the
subordinates responsibility increase in this case. On the other hand, in delegation the
managers remain answerable even for the acts of subordinates to their superiors.

3.0 Industrial profile

3.1 International Scenario

Electronics Industry

Every day the demand and price of electrical and electronic items are fluctuating with
competition becoming tough in the market One of the primary growth drivers in electrical
and electronic industry, especially the electronic part, is selecting and understanding the
34
market to be served and focusing on the market. Top companies have achieved these critical
mass through acquisition and expansion, by obtaining global footprint in order to serve
customers worldwide, and integrate their business model. The electronics industry is a nearly
S60 billion global industry. India and China have come up with great development in this
industry in quantity production.

The innovation and design part is again the prime work of the developed countries. Here it is
just copied and produced at lower costs due to chief labour. The products are exported for
consumption or for re-export, as in the case of Middle East countries.

United States, Japan and Korea are the top three electrical and electronic goods
manufacturing country in the world, i he United States of America is the largest producer of
electronic products in the world, contributing a total share of around 21%. Furthermore, it
also occupies the largest market share with about 29% in the global market. The Worlds
electrical and electronics market size was $1038.8 billion in 2006, an increase of 10.6% from
tbc last year. The industrial electronics industry size was $651.3 billion, contributing around
62.7% of the total. With regard to electronics parts and components sector, the total market
share was $282.7 billion i.e. 27.2% while home electronics was S 104.7 billion. Sony
Corporation, Apple Inc., Sharp Corporation, Toshiba Corporation, Matsushita Electric
Industrial Co. Ltd., LG Electronics Inc., Royal Philips Electronics N.V, SANYO Electric Co.,
Ltd. and Samsung Electronics Co.Limited are the key players of electrical and electronic
products in the world market.

3.1.1 Key segments of electrical and electronics industry

The global electrical and electronics sector is highly fragmented,comprising of various

auxiliary sector namely electronic components, computer andoffice equipment,
telecommunication, consumer electronics and industrial electronics.

Electronic Components Industry comprises of various establishments engaged in designing,

manufacturing, marketing, supporting, selling anddistributing of broad range of electronic
components such as bolts, clamps, fasteners, rivets, lighting, semi-conductors, integrated
circuits, microprocessors, cables and wires, switches, sensors, keyboards, sockets, timing

35
devices, laser modules, sonar devices, test and inspection equipment, scientific and technical
instruments etc. US, Japan, Europe, China, Taiwan, and Hong Kong are the leading markets
of electronic components in the world. Semiconductor sector is the largest and highly
profitable sector. The global semiconductor industry is worth $248 billion, of which China
accounts for $ 63 billion. China, United States and Japan are the largest semiconductor
producing countries in the world.

Computer and Office Equipment Industry consists of various establishments engrossed in

manufacturing and supplying of assorted range of computer hardware, peripherals, software
and office equipment. Presently, United States, Japan and Europe occupies leading positions
in manufacturing of computer and office equipment. The United States computer and office
equipment industry constitute of more than 10,000 companies with collective annual revenue
of US $180 billion. Telecommunications Industry can be divided into two main sub sectors
i.e. communications equipment and communication services. The United States of America is
considered to be the leading market in the world for communications equipment, which
contributed around $95 billion in 2006, Telephony and terminals equipment is one of the
dominant sectors of this industry with a market share of almost 80%. China, Taiwan, United
Kingdom, South Korea and Belgium are the top exporters of telecommunications equipment
in the world. Another important sub sector of telecommunication industry is communication
service, which earned revenue of 55.6% last year. China boasts of the largest mobile phone
market with about 131 million mobile phone users, which is expected to peak to 300million
by 2005.

Consumer Electronics Industry constitutes of units involved in designing, manufacturing,

marketing, and distributing of audio, video and games products. Some of the consumer
electronics products arc televisions, stereos, speakers, video recorders, CD players, radios,
cameras, wireless devices, kitchen appliances etc. This industry is experiencing an astounding
and phenomenal growth over the past few' years. The size of the global consumer electronics
industry was S 135.4 billion in 2006, which is forecasted to reach $ 15B.4 billion in the year
2008. Industrial Electronics Industry is made up of various establishments committed to
designing, developing, manufacturing and selling of broad range of electronic components
and systems used in equipment and automated processes serving in an industrial environment

3.1.2 Major production and export centers.

36
Western Europe is gradually developing as new global hub for the electronics manufacturing
industry in the world. Comprising of 16 countries, the west European electronics market
contributes around 22% of the global market share. Simultaneously, electronics market in
eastern Europe in 2006 was $9 billion, which is forecasted to jump to $24 billion in 2015. In
Asia pacific region, japan, Korea, china, Taiwan, India and Singapore are the principal
manufacturing hubs for electrical and electronic products. China is becoming the
manufacturing region of electrical products on the globe. The key manufacturing destination
is Guangdong province, South Jiangsu, Shanghai and eastern part of Zhejiang

In United Statesof America, New York, Atlanta, Colorado,Detroit, Florida, New England,
San Diego industrial hubs of electronics industry. Presently, the electronics products
manufacturing is expanding on an unprecedented scale in Asian region and deflating in
Americas and Europe. In year 2002, Asia occupied 41% of total electronics market share,
which has now risen to 56% in 2013

Factors governing growth of electronics industry:

1.Rising and continuous investments in research and development has led to productivity and
higher-value added electrical and electronics products.

2. Increased foreign investments have resulted in the accelerated growth in terms of nics
production and exports. Foreign companies are now making huge investments and are
installing extensive production capacities in developing countries.

3. Extends support to several global industries namely medical, telecommunications,

industrial and automotive sectors

4.Rising incomes and living standards have resulted in the increase in demand of electronics
especially consumer electronics products in the world.

5. This industry is highly fragmented which comprises of many small and medium size
enterprises.

37
6. Asia Pacific region is emerging as the most spinning place for the consumer electronics
industry, as the markets remain still unreached.

7. Rapid pace of innovation in electronics technology is resulting in a consistent demand for

newer and faster products and applications

While the electronics industry seemed to falter globally in 2001, China was one dramatic
exception to the rule. This nation is being seen as the new hot spot for growth. For businesses
bitten by the worldwide recession in the electronics sector, China is emerging as the best bet.
Domestic demand for electronic components and semiconductors is rising fast. Colour TVs,
mobile phones, PCs, DVD players, digitalconverters, and mobile communication cameras,
smart cards, set-top boxes, digital converters, and mobile communication infrastructure
products arcare experiencing a blooming growth.

China boasts of the mobile phone market with about131 million mobile phoneusers, which is
expected to peak to300 million by 2005. The increasing mobile phone market in turn drive
the demand for flash memories, since Chinese language textrequires additional storage
capacity compare to other language.

The market also yearns for more LCD screens, capacitors, resistors, and a multitude 0f active
and passive electronic component manufacturing base. The Chinese PC market is the second
world. Despite a downturn in the global PC sector, growth in Chinese PCboosted by domestic
demand was the fastest in the world Semiconductor is the third largest market with about $8
billion annual sales. Mainland China experienced an explosion by chip makers in 2001.
Major expansions in 2001 covered everything from electronic design automation (EDA)
services and fabless chip alliances to foundry partnerships and production equipment

Taiwan has carved a niche for itself in the global electronics space. The high-tech industry
has flourished in the country and is expected to play a major role in the development process
of the economy going forward. Taiwan, initially known for its chip manufacturing facilities
and expertise, has progressed into an innovative and technically competitive nation. To a
large extent, an innovative culture coupled with support of the government has been
instrumental in the growth of the nation

38
The worldwide electrical and electronics industry is experiencing phenomenal and
remarkable changes these days. The worldwide electron's industry is distinguished by fast
technological advances and has grown rapidly fast most other industry over the past30years.
Voluminous production is slowly and gradually movingindustries over the past offer the
longesttowards theterm potential. In today pressure to develop new and
innovativemanufacturing companies with improved quality.

The global electronics industry is driven by demand for the products, which are durable,
lighter, cheaper, and better than the ones, they replace.To meet up the growing market
demands,industry is slowly and gradual sluftmg its base to Asia Pacific countries, which is
nowthe prominent source of electronic components and is soon going to turn out to be
theprimary destination for consumer electronics. There is an estimation that within 20
years,two third of the electronics industrywill be four times as big as today and half of it
willmove into Asia.

3.2 National Scenario

Prior to the 1980s, India's electronics industry was heavily protected. The industry used
inefficient production methods to produce obsolete products of low quality at high cost. Since
1983, various attempts were made to "liberalize" the industry. The overall effects have been
accelerated growth, the entry of many new firms in the market place and an increased
reliance on foreign technology and components. Four case studies, covering personal
computers (PCs), colour TVs (CTVs), electronic switching equipment, and integrated circuits
(ICs), demonstrate the impact which the government's new electronics policy has had on the
industry's technological capabilities and international competitiveness. There is growing
concern that liberalization has eroded the industry's technological base and made it far too
dependent on imports. A policy shift is likely to occur in the near future to promote greater
localization of component productionas well as local research and development.

The Indian electronics industry size is at USS 25 billion. It is ranked 26th in the world in sales
and 29th in production. It is growing at over 25%CAGR and is expected to reach USS 158
billion by the year 2015. Theindustry is one of the fastest growing in India, driven by growth
in key sectors such as IT Consumer Electronics and Telecom. The demand for electronics is

39
expected to be fuelled by the growth of telecommunications (250 million subscribers by
2007), PCs and notebooks (5million every year), broadband connectivity to ruralareas.

Exports have been posting strong growth across segments.Electronic exports have seen a
healthy CAGR of 15% over the period 2000-06 Electronic components contributed the major
share to exports at nearly 40%. A key factor driving exports has been the increasing trend of
contract manufacturing. Consumer Electronics, Components and Computer Hardware appear
the most attractive segments for investment, in terms of size and growth Indias Electronics
sector presents several attractive options for growth. Consumer electronics, Components and
Computer Hardware are attractive segments offering both size and growth potential.
Addressing the Indian market requires the right technology,cost, good understanding of the
local market and product customization to suit local needs. Some of the brands are LG,
Phillips, HCL,Videocon,and Onida

The electronic industry in India constitutes just 0.7 % of the global electronic industry. Hence
it is miniscule by international comparison. However the demand in the Indian market is
growing rapidly and investments are flowing in to augment manufacturing capacity. India
however remains a major importer of electronic materials, components and finished
equipment amounting to over US$12 Billion in 2005. This is not a desirable situation and
local manufacturing has to keep pace with growing local demand. The output of the
Electronic Hardware Industry in India is worth $11.6 billion in the year 2007. Production is
mainly in the consumer electronics segment ($ 8.7 billion) followed by industrial production
($ 2.55 billion), communicationand broadcasting equipment($ 2.32 billion),computers
($ 1.12 billion)

India is also an exporter of a vast range of electronic components and products for tire
following segments of display technologies, entertainment electronicsOptical storage
devicespassive components, electromechanical components, telecom equipment, transmission
andsignal equipment, semiconductor designing, electronic manufacturing services (EMS).

The consumer electronics market is one of the largest segments in the electronics industry in
India. With a market size of Rs.15, 897.13 crore ($3.89 billion) in 2006, catering to a
population of more than 100 crore people, the consumer electronics industry in India is
poised for strong growth in the years to come The Indian audio/ video consumer electronics

40
industry is predicted to grow to Rs.26, 931.13 crore ($6.59 billion) by 2011, rising at a
Compound Annual Growth Rile (CAGR) of 10. per cent from Rs. 18,390 crore ($4.5 billion)
in 2007 The growth will be aided by a multitude of factors, including growing consumer
confidence due to rising disposable incomes , easy financing schemes that are making
purchases possible , increased local manufacturing , expanding distribution networks ,
sporting events like IPL .

Television continues to be the mainstay of the consumer electronics industry in India with the
transition slowly occurring to newer technologies such as LCD and PDP. Most players in the
consumer-electronics industry have introduced products in the FPD segment, and for few
companies, especially the Korean chaebols, FPD remains a focus area Companies are
focusing on customising products to suit Indian tastes, thereby creating a niche for
themselves. Several companies are conducting market research in order to understand the
psyche of an Indian consumer. The inputs from this research are determining product
attributes and pricing and accordingly are achieving better acceptance among consumers.
By conducting consumer research, companies are trying to identify customer requirements,
thereby incorporating specific design elements into their products. For example, LG in 2006
launched a range of TVs from 21 inches to 29 inches in size that were designed based on the
companys research on consumer preferences for television sets. Domestic manufacturing is
expected to manufacturing to be a key characteristic of this growth in the years to come.
Although electronics production has remained a miniscule portion of overall Indian
manufacturing for a long time, the trend is gradually changing. The government has been
focusing increasingly on developing the manufacturing sector by developing infrastructure,
rationalising duties and creating export-promotion zones. This is in alignment with India
figuring into the plans of several companies that want to cater to the domestic and export
markets. Domestic consumption is reaching significant size to trigger manufacturing in the
electronics sector. India also is assuming a significant place in the global plans of several
major electronics manufacturers, thereby positioning it also as an export.

There are still challenges facing the India consumer electronics industry as the sector tries to
realise its full potential. These include declining margins for many players; inverted duty
structure; expansion of distribution reach; creating awareness about new technologies and
products and low affordability level of consumer products among the rural masses. However,
these challenges are gradually being addressed. And looking ahead, India will continue to

41
grow as an important market for the global consumer electronics industry. The future of
India's consumer electronics market is indeed bright.

The Electronics Manufacturing Services (EMS) Industry in India is buzzing with activity.
According to estimates, EMS industry (electronic PCB assembly and ODM services) in India
will grow from $900 million in 2005 to $2.5 billion by 2010, at an annual growth rate of
about 30 percent. Much of this growth is propelled by the burgeoning demand for telecom
equipment and consumer products, including mobile handsets. The demand, in turn, is
prompting manufacturers like Nokia, Samsung and Motorola, as well as top EMS/ODMs like
Flextronics, Jabil Circuit, Elcoteq and Solectron, to establish manufacturing bases in India.
Hon Hai Precision Industry and Sanmina-SCI are in the process of setting up their units.
Experience is said to be the key factor differentiating the Chinese and Indian electronics
industries. The advantage of India is her software expertise and knowledge of the English
language. India must improve its infrastructure and develop the electronic eco-system to
bridge the gap with China.
However weak infrastructure has been the main factor responsible for decreasing foreign
investments in manufacturing. The Government tariffs also play a key role. India is said to be
five to seven years ahead of China in engineering services space. The investment climate is
improving steadily. Key players in the Indian electronics market are Flextronics, Jabil
Circuits, TVS Electronics, Solectron Centum, LG Electronics, Tata InfoTech, Samsung India,
electronics India and Bharat Electronics Ltd. Emerging new players include D-Link and
Wept, while Samuel and Tyco are already significant and will continue to emerge as global
players in theexpertarena. Nokia and Elcoteq are expected to set up manufacturing plants for
handsets in south India. The freight cost in India is 20% lesser than that of China.

3.2.1 The key electronic associations in India arc:

CEAMA: Consumer Electronics & Appliances Manufacturers Association

ELCINA: Electronic Industries Association of India
ISA: Indian Semiconductor Association
MAIT: Manufacturers Association for Information Technology
TEMA: Telecom Equipment Manufacturers Association By the year 2010, following
are expected:

42
1. Mobile installed base: 500 million
2. PC sales: 25 million; installed base 65 million
3. ITES & Software exports: USD 60 billion
4. 40 million new internet connection; at least 50% broadband
5. Nationwide TV broadcast to be digital by 2015 beginning 2010: significant opportunity
for STB consumption & manufacturing
6. Over USD 10 billion investment in e-govemance and national id card

In 2015 the industry is expected to be worth US$ 320 billion and domestic production at US$
155 billion.

3.3 State Scenario

Keralas GDP grew an impressive 10.3% between 1999-00 and 2005- 06 to reach US$ 26.44
billion. Tertiary sector has been the fastest growing, at a Compound Annual Growth Rate
(CAGR) of 12.6% between 1999-00 and 2005-06, driven by sub-sectors like trade, hotels,
transportand communication that grew at a rate of 14.5% in 2005-06 over the previous year.
The households in Kerala have high disposable incomes. The per capita income of Kerala
was US$618.9 in 2004-05, while the All-India average is US$ 514.2.

Estimated percentage of population in Kerala below poverty line is 3.6%, as compared to

19.34% in the all-India scenario. Distribution of households by income shows that share of
households in higher income categories in Kerala greater than for all-India, a trend common
for the rural as well as urban households. In ownership of assets and consumer electronics,
Kerala is ahead as compared to all-India.

In the electronics industry there has been a 30% growth in domestic demand for electronic
goods. A self-contained Electronics Technology Park, Techno Park, Trivandrum has been
established which is fast attracting electronics manufacturers worldwide The state has an
advantage of the availability of skilled and semi-skilled workers for the electronics industry.
The Government of India has launched the Rajiv Gandhi Grameen Vidhyuteekaran Yojana
(RGGVY) for the electrification of 3578 Habitations in 930 Villages covering 14 districts of

43
Kerala US$ 49.3 million sanctioned to implement the scheme during first phase covering
seven districts.

Keltron spearheaded the electronics industry in Kerala. Other players are Traco Cable
Company, which manufactures high quality cables and wires to meet the needs of PSUs in
India. Transformers and Electricals Kerala limited (TELK) manufactures extra high voltage
electronic equipments. Techopark, Infopark provide good infrastructure and skilled personnel
for the electronics and technology industry of Kerala to grow to new heights.
4.0 Company Profile

4.1 History of the Company

Keltron, Kerala State Electronics Development Corporation Limited, is a public sector

Electronics Company located in Kerala, a state in India. It is headquartered at the capital city
of Kerala, Thiruvananthapuram. The company is under the direct control of the State
government of Kerala. The registered name of the company is Kerala State Electronics
Development Corporation Limited (KSEDC). The name Keltron was coined from two words,
Kerala Electronics and when it was necessary to use a small word in telegrams referring to
the company. Later, the same naming convention was adopted to name two other state owned
electronic companies namely Mcltron (Maharashtra Electronics) and Uptron (UP Electronics)
Keltron was incorporated in 1972 as the first state level electronics development corporation
and started commercial production in 1973 .The tagline was spearheading an electronics
revolution in Kerala

Mr. K. P. P Nambiar was the first chairman and Managing Director of the corporation.
Keltrons history has been a saga of innovation in electronics It has transformed the laid back,
picturesque state of Kerala into an arena for technological development. In its early days, the
company produced DCS,PLC, electronic devices such as televisions, radios and other
consumer electronics goods. On this end, the company was a failure because its products
could not compete in international market. Keltron is famous for its automatic traffic
regulation systems. In early days, Keltron traffic signals were used in all the major metro
cities of India. Currently it is mainly used in Kerala and few neighboring states.

44
Currently, major products of the company include mines for Indian navy and various parts of
rockets for Indian Space Research Organisation (ISRO.) The company also produces basic
electronic components such as capacitors, transistors,resistors, diodes, PCBs on a large scale
for the Indian market. It also provides services in the field of information technology,
animation, and web designing. It has recently established a division for geo-informatics
services.

Keltron industrialized virgin territories and has transformed lifestyles of many households.
Today Keltron products remain as icons of technology brought to benefit the people As
diverse as its products and their uses arc, they are unified by its pivotal strength as a solutions
provider. It is this philosophy that has made Keltron a vital contributor to the changing needs
of the world. Coupled with the high caliber technical expertise available Keltron has
repositioned itself as a total solutions provider in electronics. The leadership role of Keltron
during the seventies was emulated and it was able to project itself well into the orbit of a fast
growing corporate strength of Kerala in electronics sector

4.2 Objectives of the Company

Keltron was formed with the major objective of promoting an integrated and self-reliant
electronics industry in the State. The corporate objectives are:

To setup all over Kerala electronic industrial units with short gestation periods, and
provide maximum employment to a large number of technical and nontechnical
personnel available.

To create a technical cadre this would provide the backbone for the development of
the industry in the State.

To give technical, financial and marketing assistance to the setting up of the

electronics industry in Kerala including small entrepreneurs.

4.3 Strategic Vision

45
 To be a world class, growth oriented electronics corporation specialized in providing
quality, market focused products, services and cost effective system solutions to a
large clientele.

To attain leadership position in the knowledge industry by training and utilizing the
rich knowledge capital available in Kerala, and creating a wide horizon for the
development of knowledge wares and intelligent systems.

To emerge as a strong and self-reliant business enterprise with customer focus, profit
orientation and professional outlook.

To build up Keltron as a model PSU in the Sunrise Technology sector of electronics

and IT.

To function as the backbone of electronics industry in the State.

To continue to play the role of a nodal agency of Government for accelerating the
growth of development of this core industry in the State.

4.4 Mission

Spearheading an electronics revolution in Kerala

Quality

Ensuring quality is a continuous on-going process at all production units. Each

facility has a Quality Department whose business is to see that all quality norms are strictly
adhered to in the manufacturing process.

The manufacturing centres at Trivandrum, Aroor (Near Cochin), Kannur and Kuttipuram (In
Malappuram) are ISO 9001:2008 certified. Inspectorate of Naval Armament (SINA-T), has
implemented their customized quality systems at Keltron Equipment Complex, Trivandrum.
The manufacturing plants for Capacitors, Crystals & Resistors have been granted LCSO

46
approval. In order to meet the stringent quality requirements of ISRO, ESD-control measures
have been strictly adopted at the specified areas.

4.5.1 Manufacturing units:

1. Keltron Equipment Complex (KEC) , Karakulam, Thiruvananthapuram

2. Switching Equipment Unit (SEU), Kulathoor, Thiruvananthapuram
3. Keltron Controls , Aroor, Alappuzha
4. Transmission Equipment Unit, Mudadi, Kozhikode

4.5.2 Subsidiaries:

1 Keltron Component Complex , Kannur

2 Keltron Crystals, Kannur
3 Keltron Resistors, Kannur
4 Keltron Magnetics, Kannur
5 Keltron Electro Ceramics Ltd, Kuttipuram

4.5.3 Sales and customer support

1 Thiruvananthapuram
2 Mumbai
3 Kolkata
4 New Delhi
5 Bengaluru
6 Chennai
7 Hyderabad
8 Ahmedabad
9 Kochi
10 Kozhikode

Joint sector
Koshys Electronics Ltd, Tiruvalla.

47
4.6 Product Profile

Electronic components
Aluminum Electrolytic Capacitors
Motor Start Capacitors
Metallized Plastic Film Capacitors
Ceramic Disc Capacitors
Carbon/metal Film Resistors
Piezo Electric Quartz Crystals
NTC Thermistors
Power Diodes
Electro Magnetic Counters
Motor Run Capacitors
Carbon Film Resistors

Information Technology Products

IT Total Solution Provider
Computer hardware and peripherals
Software packages
Customized software solutions
Networking solutions (LAN, WAN, Intranet)
Networking products
ID cards
SMART cards
Facility management services
IT education

Security and surveillance system

Vehicle tracking and Navigation system
Intelligence Video Surveillance and Security system
Fire alarm and Monitoring system

Process automation Systems

48
Sonar arrays
Analog control system
Data acquisition system
EP Converters

Power Electronics
Rectifiers
Industrial Battery Chargers
AC and DC drives
Energy savers

Strategic Electronics
Defence products
XBT probe
Sonobuoys
Retransmission unit

Space Electronics
Harnessing work for satellite launch vehicles like PSLV, GSLV and satellites like
INSATs, GSATs, IRS

Traffic Management Systems

Vehicle Actuated Traffic Controllers
Traffic Management Consultancy
GPS vehicle tracking and fleet management system
Reverse counters
Solar based traffic controllers and signals
LED based Railway signal lights

Keltron Equipment Complex

49
This is the major manufacturing unit of Keltron. It is located at Karakulam, 13kms from
Thiruvanantliapuram Railway station. It is also one of Indias largest manufacturers of
electronic products. It started commercial production in 1974 with more than 50 employees.
It is well-connected by road and the international airport is a 45 minute drive. Main activities
were production of T.V and ancillary activities followed by calculator production, power
electronics, CCTV, defence products.

The company has been certified ISO 9001-2000 for designing, manufacturing and supply of
Aluminum Electronic Capacitors, electric assembly modules, assembly and testing of
computer systems.

Access:

By Air - Thiruvananthapuram international airport

By Rail - 12 kms

By Road - well-connected

The complex is spread over 17 acres (10500sq.mt).

It has
Administration block
Bank
Conference hall
Parking area
Fire protection
Canteen

50
Organisation Structure

Chart No: 10

51
 KELTRON Equipment complex (KEC) is one of the major manufacturing units located
at Karakulam. KEC is classified into Five Strategic Business Units (SBU).

POWER
ELECTRONICS
GROUP(PEG)

SPECIAL
SECURITY PRODUCTS
SYSTEM GROUP(SPG)
GROUP(SSG)

KELTRON
EQUIPMENT
COMPLEX
SPACE
IDCP,Training ELECTRONICS
&Data Entry GROUP(SEG)

iTAC

Chart No: 11

52
4.7Awards and Milestones

ELCINA Award for manufacturing

National Award for indigenization of products for defence applications
State award for productivity
National Leadership Award for Research & Development
ISO 9001 for design, manufacture and sale of Aluminum Electrolytic Capacitors
ISO 9002 for manufacture, supply and servicing of Digital Switching Equipment
ISO 9002 for manufacture and supply of Electronic Assembly Module
Implementation of Online Electoral Photo Identity Card project in Kerala, Tamil
Nadu, Uttar Pradesh, Andhra Pradesh, Himachal Pradesh.
State information infrastructure for Kerala networking 32 treasuries
Computerization of commercial taxes, revenue and agriculture departments
WAN for Kerala Government secretariat
Web based messaging systems connecting all Ministers , Collectorates ,
Government Secretaries and Kerala House, New Delhi
CCTV and surveillance monitoring system at the Prime Ministers residence ,
Parliament House
First in India to design and develop 90 KVA UPS to RRC Kalpakkam in late
seventies
First to design and develop 500 KVA , 600 KVA UPS qualifying seismic parameters
for NPC AT KAIGA , MAPP
First process model in India for a steel plant at SAIL Vizag

53
 Automatic fare collection and passenger control system for Kolkata Metro Railway
project

Thus Keltron has triggered in effect a revolution that still keeps churning out its benefits to
individuals and institutions in different parts of the world, continuing in its quest to innovate
products and processes that would add further value to life and industry.

4.8 Functional departments

Every organization needs a well-established administrative setup for efficient functioning.

The keltron equipment complex has established marketing, finance, production, personel
&quality control department under the supervision of experienced and competent officers. All
the departments are under the control of departments heads that are controlled by General
Manager. The main departments in the organization. They are:-

Production Department
Personnel Department
Finance Department
Marketing
Purchase Department
Enterprise Resource Planning (ERP)
Stores Department

54
 4.8.1Production Department

Structure of Personnel Department (Chart No: 12)

PRODUCTION

PEG (CGM) SSG (CGM) SEG (CGM) SPG (CGM) IDCP (GM)

ASSLY TESTING STORE PLNG

STORE

TESTING QA ENGG

PRDN TESTING TR FS
55
 Production is the conversion of raw materials into finished products and is also
spoken as the manufacture of goods. Production in same laboratories consists of the creation
and maintenance of a clearly defined organization and makes effective and co-coordinated
use of personnel, land, buildings and equipment including the management of inventory
assets. All the activities are performed in accordance with the highest standards and at the
lowest total cost.

Before a new product can be marketed or an existing product significantly

improved, the production department together with research, product development, sales and
marketing departments must define and agree upon costs, profits, marketing dates and
product quality.

Production operations follow clearly defined procedure; they must comply

with the principle of good manufacturing practice in order to obtain products of the requisite
quality and be in accordance with the relevant manufacturing and marketing authorizations.

Production Units

SECURITY SYSTEMS GROUP (SSG)

SPECIAL PRODUCTS GROUP (SPG)

SPACE ELECTRONICS GROUP (SEG)

POWER ELECTRONICS GROUP (PEG)

ID CARD PROJECT (IDCP) & DIGITALISATION AND TRAINING (DEIT)

4.8.1.1Power Electronics Group (PEG)

Power Electronics industry deals with design, development, manufacture and

innovation of power supply units which is necessary for all electronic devices and
equipments irrespective.

Keltron has marked its presence in the power electronics sector and possess high
competitive potential with Technology developed by in-house R&D as well as with
technology outsourced from M/s ABB Switzerland andC-DAC Trivandrum

56
 Power Electronics Group of Keltron Equipment Complex, Karakulam designs,
manufactures, assembles and supplies power circuits, power supply units and components
such as:

Uninterrupted Power Supply (UPS)- (10 KVA - 1000 KVA capacity)

battery chargers
High capacity voltage stabilizers
Rectifiers
High frequency transformers
Solar inverters
AC & DC distribution boards
Energy savers etc.

This department has got several sub- departments like Marketing, Engineering,
Planning, Purchase, Stores, Fabrication shops, plating shop, Transformer Assembling shop,
Tool Room and Equipment assembling Shop, testing & Quality assurance department and
dispatch department. Keltron was the company to design and develop 90 KVA UPS in the
country for Kalapakkam Power Plant. Company also succeeded in designing and developing
600 KVA UPS qualifying seismic parameters.

The products like PCBs, Fabricators, transformers etc. are assembled and packed at the
production unit itself. The transformer assembly is carried out at the winding shop. They
have several processes done in this unit they are winding, insulation, assembling, varnishing
& drying and testing of the product is done after the final assembling. The fabrication work
are carried out at fabrication shops which consist certain jobs like, cutting, punching,
bending, painting etc. of raw material using different machines like shearing machine,
bending machine etc.

4.8.1.2 Special Products Group (SPG)

Special Products Group is established for design, development, manufacture and

supply of electronics equipments. SPG unit deals mainly with defense project. This unit

57
deals with Marketing, Planning, Designating, a production are undertaken by the department.
At present the unit is working on projects from Indian Navy.

Manufacture of Processor Based Ground Mines for Navy for the first time in the country with
the technology from NSTL,Manufacture of Steering Gear Control System, with technology
from Brown Brothers UK, for Delhi and Kora class ships of Indian Navy, Design,
development and manufacture of Echosounder, EMLog, RTU etc. for Naval ships,
Engineering and manufacture of Under Water Telephone with the technology from NPOL
etc. are some of the prestigious projects executed under SPG.

4.8.1..3 Security System Group(SSG)

This division is established for the manufacture, supply and integration of broadcast
equipments, attendance &access control system and security system. The electronic
equipment for Security System Group, which are usually, customized products with respect
to the demand of the customers. The main products of these units are closed circuit television
(CCTV), Intelligence Data Capture Systems, Global Position System (GPS), GPS master
slave clock etc.

Preservation project of the large collection of valuables in Sri Padmanabha Swami Temple is
under taken by SSG in the most scientific way. CCTV and surveillance monitoring system at
Parliament house, Prime Ministers Residence etc. was installed by SSG. Doordarsan, AIR,
Vizag steel plant, Sterlite Industries ETC. are some of the prominent customers of Keltron
security equipment. Keltrons Attendance Data Management system has been installed at
major industrial establishments in the country.

RFID, magnetic, barcode entry control system include the products and services of SSG.
GPS master slave clock installations include installations at Kerala secretariat and Legislative
Assembly. Keltron implemented the punching card attendance management system at
Secretariat.

XBT probe expendable bathy thermograph is also developed by SSG for Indian Navy, which
can measure the temperature of sea water up to a depth of 450M. Keltron is successful in the
design, development and marketing of various type of metal detectors. SSG also design and
develops special products and services on customer request.

58
Broad Equipment Products

Integrated Receiver Decoder

Multifunction stereo
Graphic Equalizer
CD player

4.8.1..4 Space Electronics Group (SEG)

Module assembly for Launch vehicles like

PSLV, GSLV and satellites INSAT, GSAT and IRSSearch Rescue Beacon

4.8.1.5 Identity Card Project Group(IDCP)

IDCP offers solution using various types of ID Cards (SMART Cards, RFID
Cards, and Bar Coded Cards etc) for different applications (Voters Identity, Employee
Identity, Traders Identity, Beneficiary Identity, Vehicle Detection & Identification, Driving
License, Electronic Number Plate for vehicles, Ration Cards tec). It is the State Level Agency
(SLA) for Election Department in Kerala.

4.8.1.5.1 Ration card projects

Renewal of ration cards in Kerala involving: Incorporation of photograph of head of the

family Upgradation of database Lamination of cover pageMedical transcription training
Infrastructure for medical transcription training Raises confidence level for self-employment

4.8.1.5.2 Colour ID Cards

Keltron make different types of Identity Cards (with Colour Photograph) for persons in
different Organizations and other Institutions with emblems and details provided. They are
also equipped with necessary infrastructures, expertise and distributed facilities of manpower
and system. The photograph will be taken at customer place using high resolution digital

59
camera and colour photo ID card will be prepared at su whose business is to see that all
quality norms are strictly adhered to in the manufacturing process.

KEC is ISO 9000 certified. Inspectorate of Naval Armament (SINA-T) has implemented their
customized quality systems here.

4.8.2.1 Quality policy

We are committed to provide consistently good quality products and services to our
customers at competent prices through regular technical up gradation cost of optimization and
an effective quality management system.

Functions:

a) Maintain good quality parts

b) Check quality of products manufactured
c) Detect and change damaged parts
d) Report any damage to superiors

60
 4.8.3 Personnel Department

Structure of Personnel Department (Chart No: 13)

HR & ADMIN (DM)

T.O ESTMNT ADMIN WELFARE

SECURITY HK

Sr. Jr. Supervisor Personnel

Supervisor
Officer

Jr. Supervisor Personnel Head of the

Asst First aid

Data entry

Operator

61
Keltron is an organisation having a corporate office, units and subsidiaries. The recruitment
function is done at the corporate level. Personnel department looks after the establishment
and welfare of employees and arranging training programmes at the appropriate time to
achieve organisational goals.

Functions:

Recruitment of apprentices on contract

Promotions / increments
Performance analysis of employees
Transfer/ deputation of employees
Resignation , retirement and termination of employees
Maintain attendance records
Organize the leave management and payroll system
Maintenance of canteen , supply of uniforms to employees
Check on the welfare and medical claim made by employees
Trade union management
Provide training, on-the-job and skill development training
Form rules and take decisions regarding disciplinary actions

The company provides Leave Travel Concession facilities. There is good worker
management relationship. The cooperative society is owned by the trade unions. The ESI Act
is applicable for insurance claims. Reimbursement is provided on medical treatment above
Rs. 10000. All employees not covered by ESI scheme are eligible to receive medical
reimbursement. Dependent family members are eligible to be covered under this scheme. All
such claims are to be submitted in prescribed form accompanied by doctors prescription and
medical bills within three months to the department. It is verified and sent to the finance and
accounts department. Liability or a financial year is restricted to a maximum of one months
basic pay plus DA Lunch in the canteen is subsidized up to 1/4th of the price. Free tea is
provided in the morning.

62
The total holidays available are 70 days a year. Casual leave is allowed for 12 days a year
without carryover. Sick leave is for 10 days a year. Earn leave is available as 1 day for 11
working days. Salaries are paid on the first week of the month.

Manpower

Top management
(CGM-DGM) - 11

Middle management
(Mgrs.-officers) - 65

Workmen
Production staff - 138
Office staff - 104

KEC has regular HRD programmes to provide in house training to its technical team. Key
personnel attend external training programmes. Keltrons strength has been an experienced,
expert and sound knowledge base equipped to provide customer oriented solutions.

4.8.3.1 Process for HRD:

Identification of training needs - department invites training requirements from all

departments category wise
Consolidation of training needs - needs proposed are consolidated category wise
as executives , supervisors , workmen
Evaluation of identified training needs - needs are categorised as major and minor
Proposal for training - the request for approval is sent to the Complex Head
Training plan- a half year training plan is charted out
Preparation of training programme - it is prepared month wise and intimations are
sent to other heads of department a month ahead
Imparting training programme - training may be imparted inhouse or outhouse
Evaluation of effectiveness of training
Performance evaluation of trainees after one month

63
4.8.3.2 Procedure for disciplinary procedures

Issue of charge memo

Suspension pending enquiry
Explanation
Enquiry by the enquiry officer
Submission of enquiry report
Final decision by management
Awarding punishment
Appeal

4.8.3.3 Procedure for recruitment:

a) Collection of manpower request from all the divisions at KEC

b) Consolidation of manpower request in order of merit
c) Manpower proposal cum plan is prepared
d) Selection procedure
a selection committee is formed
screening
preparation of selection list
offer letter to candidates
preparation of joining report
placement details
e) Report to corporate office

4.8.3.4 Procedure for attendance management system

a) Issue of photo identity cum punching cards to employees

b) Mark attendance of IN and OUT - employees arc to swipe their ID cum punching card
in the ROS machine installed at the punching area
c) Collection of attendance data - computerized attendance datas are collected on
weekly basis

64
KEC's expertise in high quality manufacturing is the result of highly skilled multi-
disciplinary team of engineers, project managers and a skilled workforce with a proven track
record in complex precision manufacturing. It also provides manpower to organisations like
ONGC, VSSC .Hitachi. It has an all India service network

Format Of Training Programme

Month:Year:SLno:

Participant:Duration:

Subject:

Date:
Venue:

65
 4.8.4Finance Department

Structure of Finance Department (Chart No: 14)

FINANCE (DGM)

SALES ACCOUNTS IMP/ COST COMPILATION PAYROLL

ASSISTANT COST ASSISTANT ASSISTANT

ASSOCIATE

Jr. Assistant

TYPIST

66
4.8.4.1Functions and Duties of DGM (Finance)

Plan, control and allocate the work in finance department with the help of
other officers in Finance.
Plans and handles the preparation of budgets and budgetary controls.
Collection of revenue and keep particulars of all staff.
Analyze the cost with the help of other officers.
Prepare audited financial statement of the Kcltron and place before the Board
and follow up.
Prepare annual budget with revenue and expenditure on each stream and
monitor budget.

4.8.4.2 Functions and Duties of Office Staff

1. Prepare financial statements and associate reports.

2. Process payments and other transactions.
3. Meet expectations of fund participants, adhering to deadlines.
4. Participate in and leading projects that may be defined from time to time in
connection with the continuing expansion and evolution of the business in the
account.

The finance and accounts department functions under four heads:

1. Cash and Compilation group

Functions are
a) Cash and bank transaction
b) Receipt and disbursement of cash and maintenance of Cash Book
c) Receipts and issue of cheques,DD, preparation of Bank Reconciliation.
d) Passing of miscellaneous bills
e) Maintenance of General Ledger
f) Preparation of final accounts
g) MIS reports, reports to financial institutions, banks

67
 h) Budget and budgetary control
i) Liaison with Statutory auditors , Government auditors and tax auditors

j) Any other matters assigned to the group by the department head

2. Purchase accounts and Costing group

Functions are
a) Scrutiny of purchase proposals for finance concurrence
b) Passing purchase bills for payment and preparation of vouchers for payment
c)Clearance of purchase documents from bank
d) Accounting of purchase bills, raising debit notes for rejections , replacement or
settlement of rejected items
e) Maintenance of purchase journal and creditorsledger Preparation of monthly
schedule of creditor

Costing Group

a) Maintenance of slock records

b) Preparation of monthly receipts, issue and slock of inventories for MIS reports
c) Verification of physical slock of inventories in coordination with stores department
and valuation of inventories for preparation of annual accounts
d) Costing of equipments , projects, jobs and furnishing periodical reports to the
management and other departments and maintaining necessary cost records
c) Any other work that may come across and assigned to the group by the department
head from time to time

3. Sales Accounting Group

Functions are:
a) Preparation of sales invoices and ledgermaintenance of sales journal and debtors
b) Preparation of monthly schedule of debtors customer-wise , in voice-wise and follow-
up with marketing for sales collection on due dates

68
 c) Submission of sales tax returns , liaison with tax auditors
d) Arrange excise duty remittance
e) Liaison with marketing for collection of concessional forms
a) Arranging transit insurance and matters relating to claims
b) Any matter connected to accounting of sales

4. Payroll Group

Functions are:
a) Preparation of payroll
b) Preparation of monthly journal entries of payroll
c) Remittance of payroll recovery including PF and ESI
d) Preparation of payment vouchers for regularization of salaries , interest subsidy on
housing loan
e) Maintenance of PF records and submission of necessary returns to PF authorities and
any other matters relating to PF/ pensioner
f) Issue of non-liability certificate to employee effecting deduction if required and any
other matter relating to such certificates
g) Issue of TDS certificate and submission of annual return to IT authorities
h) Preparation of schedules of festival advance, pay advance, marriage advance and
education advance

Thus the finance and accounts department deals with the planning and control of firms
financial resources and source of fund. It also looks after the miscellaneous payments, central
excise, and project payment. It records all expenses and income. It is the most important
department in an organization as it deals with fund allocation for the working of the
organization.

4.8.5 Marketing

KELTRON market its products through the marketing branches situated in important cities
like Hyderabad, Mumbai, Chennai, Calcutta, Delhi, Ahmedabad, Trivandrum, Lucknow and
Bangalore. The demand for the product is identified, the quotation for the same is given to the

69
concerned manufacturing units and the required products are manufactured. The corporate
office co-ordinates all the activities of the different branches.

4.8.5.1 Functions of the department

a) Retain market share

b) Create customer satisfaction
c) Ensure that the finished goods reach the customers at the right time
d) Fix up thepricingpolicies
e) Sales promotion techniques
f) Packing and dispatching of finished products
g) Take decisions regarding the distribution channels
h) Achieve the fixed sales target
i) Control sales and advertisement expenses
j) Sales equity, quotation and order
k) Collection of outstanding payments

4.8.5.2 Functions and Dutiesof Marketing Manager:

Receive, analyse and rectify customer complaints with regard to quality and delivery.
Interaction with dealers and other customers.
Gathering information on the market trends.
Preparation of marketing report - monthly basis.
Authorising internal and legal documents.
All activities related to Central Excise, Sales Tax and other legal matters.

Maintenance of customer complaints and customer communication

4.8.5.3 Functions and Duties of Assistant Marketing Manager

Document and executive of dispatches of all products sold from the factory.
Invoice preparation, sorting, distribution to customers, finance and sales.
Ensure that all documents are sent along with each dispatch.
Communicate dispatch details to customers.
Entry of production figures and assay certificate in the system.

70
 Awards and Milestones
Future Plans
Production Department
Personnel Department
Finance Department
Marketing
Maintenance of
Maintenance of invoice, credit notes and discount report.

4.8.5.4 Functions and Duties of Staff:

Planning and execution of daily stock transfer and sales.

Ensure collection of payments in required mode and forward to finance department
after necessary documentation.
Ensure credit balance before sales allocation.
Transportation bills, documentation and arrange certification.
Preparation of marketing reports on daily, weekly, monthly basis.
Review of budget utilization on monthly basis.

71
4.8.6 Purchase Department

Structure of Purchase Department (Chart No: 15)

PURCHASE (DGM)

MECHANICAL ELECTRICAL IMPORT

(Indigns) (Indigns)

Sr. Sr. Sr. Stores

FORMAN Assistant
Assistant

Store Sr. Personal

Assistance
Assistance

72
4.8.6.1Objectives

Ensure that:
a) the required materials to the prescribed specifications are purchased from reliable
sources in required quality at the appropriate time and at minimum prices
b) that fair and consistent practices are followed in making the purchase
c) that financial and legal interests of the organization are safeguarded at all times
d) that timely supplies are guaranteed

It is the duty of the purchase staff to ensure that the above objectives are met at all times and
to bring any non-adherence to the notice of the management.

4.8.6.2 Procurement activities are divided as follows for operational efficiency:

Import
Indigenous electronic item Indigenous mechanical items Transformer items General
consumable items Capital items Stationary items Service sub- contracts Cash purchase
Key functions involved are similar for all above activities except cash purchases.

Functions

a) Verification of purchase requisition

b) Sending enquiries and getting quotations
c) Preparing comparisons and negotiating with suppliers
d) Proposing order for approval and releasing the same
e) Follow up for material
f) Material clearance
g) Return rejected material and arrange for replacement
h) Payment to supplier
i) Final settlement

The purchase department handles procurement of raw materials required for production,
spares required, general items, and issues service sub contract orders .All imports are looked

73
after by one group .The department consists of seventeen members. Purchases are done based
on the purchase procedure approved by the MD of Keltron the department handles around
1000-1500 purchase offers a year with approximate values of Rs 12-15 crores the purchase
department is centralized

4.8.6.3 Functions and Duties of DGM (Purchases)

1. He has to make available the needed stocks at the required time so that the
manufacturing operations do not have to be stopped.
2. Handles the purchase with the chief manager by checking the present suppliers
policies and the price of the material to be purchased.
3. Periodically update all the terms and conditions of tenders, agreements with vendors

Office assistants are recording the purchasing procedures and repurchasing

activities. At the time of further purchase of materials, the purchase officer examines the
records of the purchase documents and informs all the details to the joint manager.

Any department in need of raw materials approach the materials department

with the purchase requisition containing the quality and quantity of goods required. After the
requisition is sent the existing stock isvalued in the stores. The engineering department goes
through the requisition. The order of approval of purchase committee is

Head (purchases)
Head (planning)
Head (QA)
Head (finance)
Group head Unit head
Head (corporate finance)
MD
Once it is approved it is sent to the purchase department, copies to planning,
finance, QA, inward stores. The vendor delivers proposed materials to the inward stores
alongwith the invoice. A copy is forwarded to the finance & accounts department. Entries are
made in the Consignment receipt control register. Consignment arrival receipt is prepared by
inward stores and sent to planning department. Six copies of goods receipt cum inspection

74
receipt are generated at the inward store and sent along with the arrived material to QA for
inspection. After inspection QA returns one copy

The materials are issued to the appropriate sections after entries in the stores
requisition issue control register and materials undergo processing as per the work order
prepared by the planning department

The purchase department plays is very important role in the company and it has the
effect on every vital factor concerning the manufacture, quality, cost, efficiency and prompt
delivery of goods to customs. Its function is to produce materials, supplies, services,
machines and tools at the most favorable terms consistent with maintaining the desired
standard of quality. Purchasing in the most important function of materials management as
the moment an order is placed for the purchase of materials, a substantial part of the company
finance is committed which effects the cash flow position of thecompany.

4.8.5Enterprise Resource Planning (ERP)

An enterprise resource planning (ERP) project is a large enterprise program, both from a
business and technology point ofview. It implements new systems and their integration with
existing systems. It organizes and co-ordinates the different departments like HR
(Human Resource), Accounts, Purchase and Inventory etc. of an organisation. An ERP is a
company-wide computer software system, and functions of a business from shared data
stores.An ERP system has a service-oriented architecture with MODULAR hardware and
software units and "services" that communicate on a local area network. ERP relates to the
integrated software infrastructure that supports the entire company business process. ERP
refers to a view of a company and all its parts as connected whole, rather than small units of
activity. A multi-module application software that help a company manage the important
parts of its business in an integrated fashion.

75
4.8.6Management Information System

Management Information System MIS, of an organization undertakes the

planning and co-ordination of finance, monthly performance reports etc. MIS prepares report
on expected monthly income, monthly budget and actual monthly income. MIS acts as a
communication hub between production centresand corporate head offices and other external
agencies and provides monthly performance reports and prepares expected market by
analysing recent market scenarios.

MIS of KEC sends monthly performance report to Economics & Statics Dept. Govt.
of Kerala, Director of Industries Govt. of Kerala, Dept. of Electronics Govt. of India,
National Samples and services Organization, CMA Bangalore.

CMA prepares report on development of Electronics technology based on such

reports from various companies.

4.8.7Stores Department

The store manager heads stores department. He is assisted by four persons; two in general
shift and one each two shift. The store manager is reporting to the general manager. The
production department submits the purchase requisition to the store. They have to check the
actual stock available and inform to the purchase department. They have to keep record of the
stock available. They have to maintain minimum stock. They have to enter the details of item
received and inform to the production and purchase department.

They have to issue the materials to the plant according to the need. They have to keep a
record of issue of materials. They also have to prepare monthly statement. Issue of gate pass
is also done by the stores department each production line procures items from the stores

Functions:
1. They have to receive purchase requisition for purchasing products each department
has to fill the purchase requisition slip with the sanction of that particular department
head and submitted it to the stores. The stores department collects the requisition slip.

76
 2. They have to inform to the purchase department After collecting the requisition slip
stores department enter the details in the purchase requisition book and hand over the
slip to the purchase department.

3. Receiving the material stores department is vested with the receiving of raw material
and they have to enter it in the goods received note with date and the quantity.

4. Check the quantity of the material stores department has received the raw material
and send it to the concerned department with the quality assurance report. The
concerned department head has to check the raw material and sign the quality
assurance report.

5. Issue of gate pass if any goods is sending out of the company Stores department will
issue the gate pass for the goods that is send out of the company for repairing such as
motor, grill etc. gate pass are of two types returnable gate pass and non-returnable
gate pass.

6. Issue of raw material to the plant - Stores issue the raw material to the plant according
to the need for that the concerned department has to fill the spare requisition slip with
the sign of department head. It must be noted in the consumption report.

7. Pass the bill for payment along with GRN to accounts department -After receiving the
raw material, stores department prepare goods received note and salt it to the finance
department with the copy of bill and the quality assurance report.

4.8.7.1 Functions and Duties of Store Manager

1. Timely action for procurement of various stores items.

2. Ensure proper inventory control.
3. Authenticate all ledger entries and ensure the audit of stores accounts.
4. To liaise with the Production Manager and Purchase Officer for timely provisioning
of stores and their issue.
5. Processing the Purchase Requisition Note.

77
4.8.6.2 Functions and Duties of Assistants

1. Receiving the material.

2. Check the quantity of the material.
3. Issue of gate pass if any goods is sending out of the company.
4. Issue the raw material to the plant
5. Check the quantity of item

4.8.7.3 Finished Products Section

The function of this section storage of finished products, preservation of the

products is handling and with the requiredquality, and its packing and despatch to the
customers.

4.8.7.4 Despatch Section

There is a separate section for the dispatch of the finished products in Keltron Equipment
Complex, Karakulam.

4.8.7.4.1 Key Functions of Despatch Section

a. Recipient, checking and documentation of input document

b. Preparation of delivery challan
c. Finalization of Transporter
d. Preparation of Despatch Document
e. Despatch goods
f. Forwarding dispatch document to marketing department
g. Forwarding freight bill with proof of delivery document to Finance Department
h. Monthly revenue report to Finance department
i. Taking care of Central Excise formalities

78
4.9 Growth Profile

Keltron has setup its own manufacturing units,subsidiaries and joint sector companies as part
of its corporate goals. The manufacturing units arc engaged in electronic equipment and
system production while subsidiary companies are engaged in the production of electronic
components. The joint sector companies operate in areas of specialized raw material
requirements of components industry. Keltron has its Corporate Office at
Thiruvananthapuram, four manufacturing units, five subsidiary companies, ten sales and
customer support offices and one joint company.

4.10 Future Plans

For a technology-driven enterprise like KELTRON, foreseeing the future needs of its
customers is vital for its survival. By forging strategic alliances with old leaders, KELTRON
is poised to maintain a global presence and keep itself abreast of current technologies.

With the synergy of highly skilled manpower and assured access to frontier technology,
KELTRON braces itself as a provider of innovative solutions, meeting the future needs of its
customers. KELTRON believes that future holds more for those who make technology work
than for those inventing it. Its focus today is in adapting technology to fulfill the needs of its
customers with a renewed mission to emerge as a solutions provider for the futureKeltron has
initiated steps to create a Knowledge center that would catalyze the process of knowledge
assimilation. It has implemented a skills development center to build skills in IT. Being fully
aware of the rapidly changing technologies and new dimensions in Intellectual Property
Rights, Keltron plans to setup a center that can help identify IPR issues arising out of frontier
technologies. This would help foster greater global competitiveness for Indian industries as
well as ensure faster innovation, wealth creation, and overall development. Continuing in its
quest to bring benefits of technology Keltron has forged strategic alliances with world
leaders:

SAP India Limited Supply, Implementation and support of ERP software

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IBM, India Computer Hardware and Software
Acer, India Computer Hardware and Software
Oracle Corporation Software Solutions
Vicon, USA Security Systems
Sab, Sweden Tank Level Automation
Auxilrol, France Tank Level Gauges

Data Loggers, USA Water & Environmental & Monitoring Systems

Lundall, USA Nucleonic Level Gauges
GMS Inc., USA Wireless Video Transmission Systems & Trans-receivers

Cohu Inc., USA CCD Cameras

Pep Modular
Process Automation Solutions
Computers, Germany
Controlc Bailey, France Process Control Instrumentatio
Distributed Digital Control Systems & Data Acquisition
Hitachi Ltd., Japan
Systems
Asca Brown Boveri Co.
UPS Systems
Ltd., Switzerland

Camille Bauer, Switzerland Electronic Indicators

Toshiba, Japan Inverters and AC Motor Drives
Brown Brothers and Co. Electronic Steering Gear and Stabilizer Control Systems
Ltd., UK for War Ships

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5.0 SWOT Analysis

A detailed study has been conducted in order to analyze the strength, weakness, opportunities
and threats of the organization.

5.1 Strengths of the company

Keltron has garnered many years of experience and domain specific expertise which
has created a unique brand name as well as goodwill in the industry.
As the organization comes directly under the Government of Kerala it is financially
sound and has a good infrastructural facility which has scope of expansion in the
future.
The organisation provides products and services of the highest quality and delivers the
same without any delays or lags.
The organisation maintains good industrial relations which brings in clients every
year.
Keltron product portfolio includes future ready product ranges.
Keltron personnel consist of dedicated and highly qualified technical staff.

5.2 Weaknesses of the company

Inadequate control over materials and resources which leads to wastages.

In certain areas of manufacturing, modern technologies and machineries are yet to be
implemented.
As the organization comes under the government, the decision making process as well
as implementation is slow and time consuming.
The existing labour capacity cannot meet incoming orders and this in turn is putting a
lot of pressure on the existing employees.

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5.3 Opportunities

The company has an opportunity of diversifying into various other facets of

infrastructural development.
Centralization of data resources by incorporating an IT department which monitors
and regulates the data pool.
There is immense scope for Keltron to expand their reach into the northern markets of
India especially by tapping the Northern Electrical Boards.
The company has an opportunity of diversifying into various other facets of
infrastructural development.

5.4 Threats

There is an increasing amount of competition from private enterprises and also from
foreign players.
As the organization is Government owned, political uncertainties could cause lot of
stagnation in the decision making process.
New government regulations and also foreign exchange fluctuations could be treated
as threats to the firm.
Absenteeism is an internal threat present in the organization.

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 Information from SWOT & Functional Areas

The above depicted SWOT ANALYSIS reveals the cause of unsatisfactory

performances and possibility of future progress. It can be clearly deduced that even has there
is umpteen opportunities available the company is not taking benefit of such situations. Even
though they understand that in order to expand their footprints they should be able to scale up
operations, but the funds allocated for such expansion is being diverted to ailing sister
concerns.

Their technological prowess and know-how could easily establish them as industry
leaders. Their present workforce is not sufficient enough to provide for when compared to the
number of orders.

The lack of proper inventory management facilitates to the rise in wastage of resources.
There is also fluctuations in the materials prices which in turn will render the finished
products costlier than that of the competitors.

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FINDINGS

KELTRON has the most trusted electronics products and it is the most popular
brand name all over India.
Keltron equipment complex has wide industrial customersall over India.
It has resulted in the increase in the satisfaction of the industrial customers &
their needs.
Keltron is identified as one of the reliable suppliers of strategic electronic products for
the Defence and Space Departments of the Government, especially for Indian Navy
Industrial relation is fairly good and there is greater cooperation between
management &employees.
Keltrons expertise in high quality manufacturing is the direct result of the highly
skilled, multi-disciplinary team of graduate engineers, project managers and a skilled
workforce with a proven track record in complex precision manufacturing.
Workers health and safety are given more important.
It has provided more welfare measures for their employees.
A good coordination exits between different departments.
Keltron equipment complex uses good quality testing of main products like
ups.
Sales promotion activities are very low compared to those of competitors.
In India keltron equipment complex has a goodwill with 41 years of
experience.
Complaints regarding the keltron equipments are very low.
It has a large number of competitors.

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 SUGGESTIONS

Feedback and suggestion from the customers should be collected and proper
corrective measures should be taken.
The promotional activities of the organization must be increased because it
playsa vital role in the environment.
The advertisement must be provided.
Proper measures should be adopted for the reuse of industrial wastes products.

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 CONCLUTION

Keltrons success has been in making technology work rather than inventing
it. Over the years it has been a public sector undertaking which has come up from losses. This
resurrection has been mainly due to good infrastructure, leadership and expertise of its
employees. Also it is customer oriented.

The company has defined scope for greater improvement as it has tie up with
the best in the international electronics scenario. Keltron is a leader as it helped to put kerala
on the map of electronics.

The organization study has provided a clear idea on the working of a large
organization and its various departments. It has helped to interact with senior officials and
staff.

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 BIBLIOGRAPHY

The website of Kerala Electrical & Allied Co. Ltd. www.keltron.org

Keltron manuals
www.kerala.com
Wikipedia
Webindia123.com

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