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An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job. Organization is an identifiable group of people contributing their efforts towards attainment of goals. An organization begins when people combine their efforts for some common purposes. The organizational objective is considered to be more important in the organizational context. Thus, the individual efforts need to be directed and coordinated towards the organizational objectives. Since the organization comprises of a combination of individual efforts, it is necessary to understand how the individual behaves in the organization, how the individuals efforts coordinated to the success of the organization. Organizational study is the systematic study and careful application of knowledge about how people as individuals and as groups act within an organization. It studies about the various departments in an organization, how it is connected towards the organizational goal. Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today's post-industrial structures. In the 21st century, organizational theorists such as Lim, Griffiths, and Sambrook (2010) are proposing that organizational structure development is very much dependent on the expression of the strategies and behaviour of the management and the workers as constrained by the power distribution between them, and influenced by their environment and the outcome. An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment. Organizations are a variant of clustered entities. An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and
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individual. Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organizations actions. Apollo Tyres Ltd. is one of the largest tyre manufacturing companies in India. The company was incorporated in 1972 and commenced its production in 1977. It was the first company to receive ISO 9001 accreditation in Indian tyre industry. In 2006, Apollo acquired Dunlop tyres of South Africa. The company has its operations in India, Zimbabwe, Netherland, Korea and South Africa with a network of over 4000 dealerships in India alone.
1. Primary Sources
Direct interview with the department heads Discussion with the divisional heads Interaction with workers in the company Data collected by observing the function of the organization
2. Secondary Sources
Annual reports of the company Department manuals Periodicals, books, etc. published materials by the company
Period of study
The study is done for 30 days at Apollo Tyres Ltd., Kalamassery.
Chapterisation
The study includes eight chapters. I. First chapter begins with an introduction of organization and organization structure, scope of study, objectives of study, methodology, tools of study, period of study, limitations and chapterisation.
II.
Second chapter is industry profile consisting of International and Indian scenario of tyre industry.
III.
Third chapter gives a description of Apollo Tyres Limited consisting of the history, mission, objectives, goals, product profile and future growth plans of ATL.
IV.
Fourth chapter deals with the organisation structure and design, explaining the type, approach and factors of organisation structure adopted in Apollo Tyres.
V.
Fifth chapter is the departmental profile describing the functions, role and structure of various departments in Apollo Tyres Limited, Kalamassery.
VI.
Sixth chapter shows the financial highlights of Apollo Tyres Limited for last three years.
VII.
Seventh chapter is the SWOT (Strengths Weaknesses Opportunities Threats) Analysis of Apollo Tyres Limited.
VIII.
Eighth chapter explains the findings, conclusions and suggestions derived from the study.
INTERNATIONAL SCENARIO
The world tyre industry is worth around US$70bn. The industry is marked by a presence of around half a dozen major players who together occupy 70% of the world market share. The table below indicates the individual market share of the major players.
Companies Michelin Bridgestone Goodyear Continental Sumitomo Pirelli Yokohama Kumho Others Source: The Financial Times
Market share (%) 19.4 19.4 16.6 7.1 4.9 3.9 3.5 1.7 23.5
The worldwide tyre industry is likely to witness more restructuring efforts after the deal between Goodyear and Sumitomo of Japan. Analysts are speculating that there will be only six to seven major players across the globe. The 'big three' of the industry i.e. Michelin, Bridgestone and Goodyear (before its alliance with Sumitomo) each had annual sales of US$12bn. Inevitably, the alliance has increased the competitive pressure on second-tier majors, notably Continental of Germany, Pirelli of Italy and Yokohama of Japan. They would also have to go on the acquisition route in order to survive. The structural developments are taking place against a background of continuing overcapacity in the industry, estimated at
around 30% and slow growth in Latin America and the Asia-Pacific region in the wake of their financial crises.
Worldwide Sales of Tyres Mn nos. OEM Replacement Total Cars 217.7 482.4 700.1 % of total Truck 31.10 68.90 100.00 50.6 198.2 248.8 % of total Total 20.3 79.7 100.0 268 681 949 % of total 28.3 71.7 100.0
INDIAN SCENARIO
The Indian Tyre Industry is an integral part of the Auto Sector and its fortunes are interdependent on those of the Automobile players. For the year 2010-11 the industry has clocked a turnover of almost Rs. 30,000 Cr. of which 90-95% has come from the domestic market. While there are around 40 tyre manufacturers in India, the top 10 tyre players account for around 90-95% of the total tyre production in India. The tyre industry can be divided into 6 categories based on the different auto segments that they are manufactured for. The table given below gives the category wise production for 2010-11. On a volume basis, the 3 major segments for the tyre industry are Two-wheelers, Passenger Cars and Truck and Bus (T&B).
The table given below gives the list of the top 3 players (considering their market share as per volumes) in these 3 major segments.
As seen in the above table, the T&B (Truck & Bus) segment is highly competitive with the top 3 players having market share very close to each other. JK Tyre is slightly ahead with a 22% market shares. Apollo Tyres is the market leader in Passenger Car segment with 24%. MRF which has a good presence in all the segments is the leader in Motor Cycle with 28% share.
MRF is a market leader in the Indian Tyre Industry with a market share of ~30%. It has total turnover of Rs. 8589.68 Cr. with average margin of 3.37% which is lower than industry average of ~4%. Its Net Sales has grown strongly with a 5 year CAGR of close to 18%. It also has one of the highest Net Profit growth rates with a growth of 68.3% CAGR over the last 5 years. However, in terms of net sales growth and highest profit margins, Balkrishna Industries Ltd. is far ahead from other industry players. Its Net Sales has grown strongly with a 5 year CAGR of 27.87%. It also has highest profit margin of 10.55% (5 year average) in the industry. This is because it operates in Off-the-Road tyres, a niche segment. Other major players are Apollo Tyre, JK Tyre & Industry, CEAT and Goodyear India.
and now it is a profit earning unit. The fourth plant was commissioned in 1996 at Pune for manufacturing tubes. The entire requirement of tubes for all plants of Apollo is done here.
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Vision
A significant player in global tyre industry and a brand of choice providing customer delight and continuously enhancing stakeholder value. The one word that symbolizes all that Apollo believe is CREATE. C - Care for customers R Respect for associates E - Excellence through team work A - Always learning T - Trust mutually E - Ethical practices
Mission
To create the first Indian Singles Grand slam Champion by the year 2018.
Objectives
High volume, high market share, cost effectiveness in all segments. High quality, technically superior products. Consistent production through harmonious industrial relations. Achievements of customer delight through benchmarking global practices. Strengthen supply chain management. Revenue growth Operating margin improvements. Employee satisfaction
Goals
Employee safety Employee satisfaction Customer delight
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Revenue growth Operating margin requirements Responsibility Learning & Development. Family Focus. Hygienic Factors. Employee Involvement & Cultural Building.
Profile of products
The company manufactures and sells a range of tyres of both Bias and Radial, tubes and flaps. The major products are trucks and bus tyre and trailer tyres. Besides these, Apollo also produces passenger tyres, light commercial vehicles tyres etc.
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Segment
Truck Apollo
Product
Loadstar Super Hercules Loadstar Super Loadstar Super Gold XT 7 XT 7 Haulug XT7 Gold XT-9 XT-9 Gold
Champion Champion DXL Champion Gold Amar Amar Deluxe Amar Gold Amar AT-Rib
Kaizen
27 L 77 R 99 R Plus
Light Truck
Passenger Car
Car Radials
Tube
Type
(Amazer
XL
Tubeless Radials
Hawkz Storm
Amazer XL
Alloy Wheels
Haste Torque
Inspire Slay
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Tubeless Radials
Acelere Amazer XL
Hawkz
Farm
Sarpanch
Krishak Super
Powerhaul
Krishak Premium
Farmking Gripper
Jeep
Maha Trooper
At the grassroots level of schools, academies and the tennis loving population, Apollo is encouraging youngsters to actively take up the sport with the full support of their parents. On the talent level, company conduct selection camps every year in four cities (called the Mission 2018 Challenge) to identify, nurture, train and groom talent from across the country. Aged between 6 and 14 years of age, they are given national and international exposure and facilities, to enable them to realise their potential and become future champions. The four cities change every year to ensure the Mission spreads far and wide in the task of encouraging participation from all corners.
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Matrix
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Advantages
Since the people are arranged on the basis of their common interests, they can learn a lot from each other. Problem solving becomes easier in a functional organizational structure. Skilled employees of the same group can find more skilled employees for the company. Control in functional structure is increased because people will try to supervise each other work. Team work is more found in a functional organizational structure.
Disadvantages
It has few downsides that may make it inappropriate for Apollo. Here are a few examples: The functional structure can result in narrowed perspectives because of the separateness of different department work groups. Decisions and communication are slow to take place because of the many layers of hierarchy. Authority is more centralized. Measurement problems are created like it becomes difficult to analyze which person is more efficient and which is not. Strategic problems are not given significant focus in this structure because coordination the top management is always busy in finding the solutions of problems.
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Organizational size
The larger an organization becomes, the more complicated its structure. When an organization is small such as a single retail store, a two-person consulting firm, or a restaurant its structure can be simple. In reality, if the organization is very small, it may not even have a formal structure. Instead of following an organizational chart or specified job functions, individuals simply perform tasks based on their likes, dislikes, ability, and/or need. Rules and guidelines are not prevalent and may exist only to provide the parameters within which organizational members can make decisions. Small organizations are very often organic systems. As an organization grows, however, it becomes increasingly difficult to manage without more formal work assignments and some delegation of authority. Therefore, large organizations develop formal structures. Tasks are highly specialized and detailed rules and guidelines dictate work procedures. Inter organizational communication flows primarily from superior to subordinate, and hierarchical relationships serve as the foundation for authority, responsibility, and control. The type of structure that develops will be one that provides the organization with the ability to operate effectively. That's one reason larger organizations are often mechanisticmechanistic systems are usually designed to maximize specialization and improve efficiency.
organic in structure during this phase. It is during this phase that the formal structure is designed, and some delegation of authority occurs. Midlife: This phase occurs when the organization has achieved a high level of success. An organization in midlife is larger, with a more complex and increasingly formal structure. More levels appear in the chain of command, and the founder may have difficulty remaining in control. As the organization becomes older, it may also become more mechanistic in structure. Maturity: Once a firm has reached the maturity phase, it tends to become less innovative, less interested in expanding, and more interested in maintaining itself in a stable, secure environment. The emphasis is on improving efficiency and profitability. However, in an attempt to improve efficiency and profitability, the firm often tends to become less innovative. Stale products result in sales declines and reduced profitability. Organizations in this stage are slowly dying. However, maturity is not an inevitable stage. Firms experiencing the decline of maturity may institute the changes necessary to revitalize. Although an organization may proceed sequentially through all four stages, it does not have to. An organization may skip a phase, or it may cycle back to an earlier phase. An organization may even try to change its position in the life cycle by changing its structure. As the life-cycle concept implies, a relationship exists between an organization's size and age. As organizations age, they tend to get larger; thus, the structural changes a firm experiences as it gets larger and the changes it experiences as it progresses through the life cycle are parallel. Therefore, the older the organization and the larger the organization, the greater its need for more structure, more specialization of tasks, and more rules. As a result, the older and larger the organization becomes, the greater the likelihood that it will move from an organic structure to a mechanistic structure.
Strategy
How an organization is going to position itself in the market in terms of its product is considered its strategy. A company may decide to be always the first on the market with the newest and best product (differentiation strategy), or it may decide that it will produce a product already on the market more efficiently and more cost effectively (cost-leadership
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strategy). Each of these strategies requires a structure that helps the organization reach its objectives. In other words, the structure must fit the strategy. Companies that want to be the first on the market with the newest and best product probably are organic, because organic structures permit organizations to respond quickly to changes. Companies that elect to produce the same products more efficiently and effectively will probably be mechanistic.
Environment
The environment is the world in which the organization operates, and includes conditions that influence the organization such as economic, social-cultural, legal-political, technological, and natural environment conditions. Environments are often described as either stable or dynamic. In a stable environment, the customers' desires are well understood and probably will remain consistent for a relatively long time. Examples of organizations that face relatively stable environments include manufacturers of staple items such as detergent, cleaning supplies, and paper products. In a dynamic environment, the customers' desires are continuously changing the opposite of a stable environment. This condition is often thought of as turbulent. In addition, the technology that a company uses while in this environment may need to be continuously improved and updated. An example of an industry functioning in a dynamic environment is electronics. Technology changes create competitive pressures for all electronics industries, because as technology changes, so do the desires of consumers. In general, organizations that operate in stable external environments find mechanistic structures to be advantageous. This system provides a level of efficiency that enhances the long-term performances of organizations that enjoy relatively stable operating environments. In contrast, organizations that operate in volatile and frequently changing environments are more likely to find that an organic structure provides the greatest benefits. This structure allows the organization to respond to environment change more proactively.
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Technology
Advances in technology are the most frequent cause of change in organizations since they generally result in greater efficiency and lower costs for the firm. Technology is the way tasks are accomplished using tools, equipment, techniques, and human know-how. In the early 1960s, Joan Woodward found that the right combination of structure and technology were critical to organizational success. She conducted a study of technology and structure in more than 100 English manufacturing firms, which she classified into three categories of core-manufacturing technology: Small-batch production is used to manufacture a variety of custom, made-toorder goods. Each item is made somewhat differently to meet a customer's specifications. A print shop is an example of a business that uses small-batch production. Mass production is used to create a large number of uniform goods in an assembly-line system. Workers are highly dependent on one another, as the product passes from stage to stage until completion. Equipment may be sophisticated, and workers often follow detailed instructions while performing simplified jobs. A company that bottles soda pop is an example of an organization that utilizes mass production. Organizations using continuous-process production create goods by
continuously feeding raw materials, such as liquid, solids, and gases, through a highly automated system. Such systems are equipment intensive, but can often be operated by a relatively small labour force. Classic examples are automated chemical plants and oil refineries. Woodward discovered that small-batch and continuous processes had more flexible structures, and the best mass-production operations were more rigid structures. Organizational design depends on the type of business. The small-batch and continuous processes work well in organic structures and mass production operations work best in mechanistic structures.
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VICECHAIRMAN
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Human Resource
Industrial Engineering
Q-Tech
Production
Engineering
Commercial
Systems
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Key functions:
To design and implement procedures, policies and systems those are transparent and help in achieving company goals. Industrial relations To boost productivity and improve quality through internal customers Developing people and teams Managing change Integrating people into the companys vision, culture and philosophy Manpower planning, recruitment, employee orientation Induction, conformation, campus recruitment and internal recruitment Travel, transfer, ambulance room, statutory compliances Compensation policies, attendance and leave administration, payroll advice, performance appraisal, training and development, benefit administration, disciplinary action and safety
HR Mission
To create HR policies and processes which are employee friendly. To build a culture which has warm forthcoming and is professional with a sense of ownership & pride. To encourage innovative thinking. To encourage transparency & teamwork. To develop leaders at all levels with general management skills. To create a learning organization. To develop competencies & skills through training and development. To constantly raise levels of employee productivity. To be a change agent. To create HR brand. To work towards attaining & sustaining the best employer status.
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Commitment of the top management, which is the backbone for the success of all new
HR initiatives
EXECUTIVE WELFARE
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The following factors form the basis for the manpower planning exercise:
Product Mix Optimum equipment capacities Existing manpower Envisaged organization structure Comparison of actual versus expected productivity ( measured in terms of Kg/manhour)
Keeping in mind these factors, each Department/Function is expected to make an estimation of the human resource requirement phase wise at each location, along with the profile of people needed and the sources from where they can be obtained. The manpower plan covers all levels viz., workmen, staff, officers, and managers. The total manpower requirement is discussed with the president/VC & MD. After the formal sanction has been given, HR incorporates the manpower requirements into its Annual Requirement Schedule. Attempts are made to look into possibilities of relocation and redeployment for filling up the vacant positions before resorting to recruitment from external sources. Once the annual manpower plan has been frozen, the norm is to ensure that no deviations are there in terms of requisition for additional vacancies at a later stage during the year.
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PERFORMANCE APPRAISAL
Performance Appraisal is the process of evaluating the performance of the employees in comparison to a set of standards and then communicating that information to the employees. Such appraisal is also known as performance review, performance evaluation, employee rating, employee evaluation or result appraisal.
Objectives
To review the performance of the employees over a given period of time and reward for good performance. To judge the gap between the actual and desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior-subordinate and management employees. To diagnose the strengths and weaknesses of individuals so as to identify the training and development needs for the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personnel decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other HR functions of thee organisation such as recruitment, selection, training and development. To reduce the grievances of the employees.
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Executives
Apollo conducts an efficient performance appraisal system for their executives. It is a centralized appraisal system. The online appraisal is known as PACE (Performance Appraisal & Career Enhancement). It is done in every quarter and the annual review time period will be from April 1st to March 31st. The appraisal process begins with goal setting. Goal setting process starts with corporate goal setting, department and individual goal setting. Key Result Area (KRA) has to set by each executive. KRA is the particular area or responsibility or target area for an executive along with their manager. At the time of appraisal, the reporting supervisor along with the section manager assesses the attained performance of the executive and evaluates the performance in the light of set standards for performance.
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INDUSTRIAL RELATIONS
Union management relation:Mutual trust + Understanding = Teamwork. A good industrial relation exists in the organization. The management and the employees jointly find the solutions for the problems. There exists a well relation between employer and employees. There are four main trade unions recognized by the company are: ATSWN (Apollo Tyres Staff and Worker Union) ATEU (Apollo Tyres Employees Union) ATMS (Apollo Tyres Mazdoor Sangh) ATWM (Apollo Tyres Workers Movement)
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Objectives
Training program at Apollo Tyres Ltd., Kalamassery aims to accomplish the following objectives: To keep track of the competence and awareness level of employees, performing work affecting product quality, environment, safety and health and to provide training based on specific requirements. To provide training to personnel with product design responsibility in applicable tools and techniques based on specific requirements. To provide training to employees on specifically identified training needs and also to improve the general awareness level of employees in various areas. To motivate employees to achieve quality objectives, to make continuous improvements and to create an environment to promote innovation.
Jyothirgamaya
On each working day about 10 employees are selected for training in a classroom atmosphere, about the productivity, quality and scrap reduction. The employees are provided training specialty about the company and the tyre industry in general. Jyothirgamaya provide information regarding the changes happening in the industrial field. Its objective is to give training for all the employees in the unit within a period of 1 year.
WELFARE MEASURES
The organization provides good welfare services to its employer. The company runs a subsidized canteen on contract basis. Rest rooms with locker and washing facility, arts and sports club, well maintained library are other facilities provided. A well transportation facility is given to all the employees from different destinations from which they have to pay a very less amount. All employees drawing a salary below Rs.6000 are covered under group accidental policy and medi claim policy. The welfare department ensures proper blend in the mental and physical health of the employees. Positive measures are taken in maintaining the health of the employees.
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Welfare measures
Canteen: Companies normally provides canteen facilities for its employees. It
is running in a one year contract based level. The company pays a monthly subsidy of Rs.1225000 to the canteen contractor. An amount of Rs.20 is collected monthly from employees. Transportation Facility: Company provides transportation facility to all its
employees working in night shifts, they provides bus and tempo for travelling Locker room: It is provided for safe deposit to personal documents and money Toilets Hot water Cooler Rest room Waiting room Uniforms Shoe allowances
SAFETY
The organization follows all the provision under the factories Act 1948, the plant is well equipped with safety machines and directions are given for the same. Safety directions are placed at noticeable points in and around the plant premises. Fire extinguishers are placed reachable points and employees are well trained to use if necessity comes. Those who work in the production unit are given masks, safety gowns and shoes. In Apollo a separate book is given to each employee, which prescribes certain rules and procedures in order to create a working environment free of accidents. No major accident has occurred in the plant for past ten years. The following are some of the safety policies of Apollo Tyres Ltd.
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Accidents resulting in personal injury and damage to property and equipment represent needles human to economic waste, which must be prevented by every reasonable means available.
All personal injuries are prevented. The protection of human life demand a complete and continuing to eliminate accidents. Officers of all level have a primary responsibility for the safety and well being of all persons who report of him.
SECURITY
The security is concerned with the physical movement of men and material. Security staff headed by the associate manager works at all the shifts. To facilitate the security measures, single point entry is adopted to control visitors. For materials, separate gate passes are issued.
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The major functions of this section are: Heading security functions Laison with police/Govt. & other external agencies Vigilance on trade union activities Indirect labor management: Contract labors are co-ordinated & their database is maintained by Security wing. Training and Development functions Event Management: Factory Day, Safety Day, Onam celebrations, Plant visit by important authorities are organized and conducted by security wing. External Environment Maintenance: Contacts to be maintained by the security department.
Apollo Tyres boasts a vibrant and dynamic, professional and non-hierarchical culture. Transparency and communication are cornerstones of corporate practice, across levels, to ensure that each individual employee is aligned with the goals and aspirations of the company. At Apollo Tyres the three corporate pillars People, Quality and Technology underpin all activities and processes. These are the company's stated areas of corporate excellence, in its journey towards becoming a best-in-class global manufacturer. In its passion to innovate, Apollo constantly looks to be proactively different from others in the industry. Its core values of ethics, respect and care, ensure that all Apolloites bring their own brand of uniqueness and passion to drive the company to greater heights.
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All training programmes are consolidated under the Apollo Laureate Academy. In collaboration with leading institutes like the Indian Institutes of Management, Management Development Institute, IMD, Dale Carnegie Training and knowledge partners like Mercer and Thomas Profiling, domain-specific training needs are identified and programmes are developed.
The Apollo Laureate Academy encourages individuals to attend seminars, meets, conferences and workshops taking place in the public domain, to ensure both professional growth and learning, as well as to build relationships and network with similar communities across industries. For the vital sales and marketing and manufacturing teams, specialized programmes have been developed to enhance skills, and identify individual areas of strength.
Promotion Policy
Each section has a channel of promotion. An executive can be promoted step by step and have the opportunity to become a division head. The promotion policy for executives is as follows:
E1
E2
E3
Associate Manager
Manager
Normally, promotions for regular workers from L-2 to L-11 grades are given based on
seniority in the concerned promotion channel. However, in the case of certain selection posts such as Junior Asst., Senior Asst., Grader, Green Tyre Inspector, Technician-Test Wheel, Instrument Technician, Machinist-B, Leading Hand-RMS applications will be invited from
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the eligible employees. Selection for promotion will be based on the performance in the written test and interview. Usually, promotions are based on following factors: 1. Experience 2. Qualification 3. Marks for Attendance Marks for Attendance Percentage of attendance Marks 100 99 98 97 96 95 94 93 or less than 93 20 19 18 17 16 15 12 9
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Conduct work studies, improvement studies in various equipments and fixing of norms. Capacity calculation in various equipments for time to time inquest to various changes. Design, implementation and follow-up scheme in various zones. Planning and assessment of manpower requirement in various
departments periodically. Study plant layout and material handling systems and suggest for improvements Explore the possibilities of capacity expression and prepare the report Visit other industries for industries for getting information regarding new developments. Suggest various cost reduction programmes. Conduct improvement of methods and equipment design compatible to best economic standards Evolve various strategies to optimize inventory levels at various stages such as engineering stores. Preparation of monthly production plans Communication of organizational goals down the line Prepare adjust and issue of different operations based on the programs, inventories, programs of work and specifications Follow up programs of work in all sections Report relevant details and assist to maintain steady progress of work Take physical inventories from the stores of finished goods and raw materials Maintain records of inventories Report shortage, rejection and delay in the operations and take corrective measures Maintain good housekeeping Ensure that no material is leftover when size changes occur Keep record of non moving material, unidentified material ,scrap generated, obtained disposal instruction, report follow up actions and to clean up materials Preparation of raw material requirement based on monthly production ticket
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Major Functions
1. 2. 3. Bench marking Key result area identification GAP Analysis Incentive Planning
4.
Other Functions
Conduct work-studies, improvement studies in various equipment and fixation of norms. Capacity calculation of various equipment from time to time consequent to changes. Design, Implementation and follow up of incentive schemes in various zones. Planning and assessment of manpower requirements of various departments periodically. Studying plant layout and material handling systems and suggesting improvements. Explore the possibilities of capacity expansion and prepare project reports.
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Negotiations with unions regarding various issues like incentive schemes, productivity and expansion and labor issues.
Analysis of capital expenditure request from various departments and make recommendations to Senior Management Committee
Prepare budgetary planning for capital and cash flow requirement Prepare documents for long-term settlements, bonus settlements etc. and represent the management in the meetings with the Unions / Labor Departments.
Visit other Industries for getting information regarding LTS methods, practices and other developments.
Conduct various training classes for workmen, supervisors, other officers and new recruits.
Apply various Industrial Engineering techniques such as job evaluation, O & M (Organization & Methods) studies, Kaizen, Line Balancing etc.
Suggest various cost reduction programs and implementation. Associate with professional bodies like Productivity council, NITTIE, and Institution of Engineers etc.
Conduct daily audit of manpower, productivity, lost time, scrap details, absenteeism, overtime etc.
Furnish various other management information reports to the top management. Evolve best practices and processes through global benchmarking in the context of global competitions and intense customer focus.
Optimize inventory levels at various stages such as engineering stores, work in progress are finished goods.
Continuous improvement of methods and equipments design compatible to the best economic standards
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SYSTEMS DEPARTMENT
The systems department is responsible for computerization of different departments of Apollo Tyres Limited. It operates and co-ordinates all systems in the organization. At Apollo Tyres Ltd., Kalamassery an associate manager is in charge of systems department. He directly reports to the unit head.
Apollo uses Enterprise Resource Planning (ERP) as an IT enabler across the company to develop integrated database. The ERP package implemented in ATL is SAP R/3, which stands for System, Application and Products in data processing. Since ATL is following SAP system in all its departments, system department plays a pivotal role in the day to day smooth functioning of the company. In collaboration with IBM, SAP was successfully implemented at ATL on 1st February 2004. ATL was the first manufacturing concern in India to implement SAP for the whole organisation without defects within a short span of time. Since the implementation in 2004, till today no major problems were reported. That shows the efficiency of systems department of ATL.
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Primary functions
The two primary functions of systems department are as follows:
1. Monitoring function
Security problems in the SAP were solved using central virus scanning system and firewall at the head office (Gurgaon and Haryana). HCL solve all problems related to the network connection.
2. Maintenance function
The systems department in the plant solves the network problems as well as the computer problems. Regular backups were taken daily and monthly for providing reliability in the SAP system. All the computers were connected using both point to point and star topology to form an intranet inside the plant. Proper authentication was given to each department members using a user ID and password.
PRODUCTION DEPARTMENT
Kalamassery plant with an installed capacity of 100 MT/day contributes approx. 300 Cr to the total turnover of the Apollo group. The daily production target of the Kalamassery unit is 100.81 metric tons. Production is carried out in three shifts. Every month end, production intends are obtained from the marketing department of Apollo tyres Ltd, Delhi stating how much tyres need to be manufactured. Kalamassery plant primarily focuses on the bias tyres production. The production department is divided into three main divisions based on the various stages of tyre manufacturing: The main functions of Division 1 are: 1. Mixing 2. Dipping 3. Calendaring 4. Extrusion
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Division 2 has the following functions: 1. Bias cutting 2. Band building 3. Stock preparation 4. Tyre building
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COMMERCIAL DEPARTMENT
Organization Structure of Commercial Department
ASSOCIATE MANAGER EMS MANAGER FGS EXECUTIVE RMS ASSOCIATE MANAGER EXCISE
EXECUTIVES
EXECUTIVE PAYROLL
PURCHASE SECTION
The main function of purchase department is to provide right material at right time in right place at right quantity. This department is concerned with the purchase of both indigenous and imported materials. It covers procurement of indigenous. Engineering spares, general engineering and miscellaneous items other than raw materials. This department is headed by senior manager and under him there are a number of officers and staff. The department is provided with the latest communication facilities and computers.
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The purchase may be corporate purchase of plant purchase. Under corporate purchase the raw material is purchased after considering what the market require for the month. Under plant purchase, purchase may be of stock item or of non stock item. Stock items are purchased for regular use. They are having material codes. They are purchased after considering the reordering level, reorder quantity, lead time etc. For non stock items there is no regular purchase. Different departments have to prepare purchase requisitions. The items purchased are engineering item, oils, & lubricants, local raw material, import of spares etc.
Vendor Selection
This includes a list of steps involved in selecting the right vendor for stack items identified as critical by the department to enable a smooth functioning of the plant. Vendors are generally identified as: 1. Manufacturers 2. Dealers 3. Firms offering various services
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2.
manufacturer and source the items directly from them so as to get quality products or services at optimum cost. Information available on supplier's manuals, catalogs, details available on the nameplates of machines etc. shall be used for the purpose.
PURCHASING RECORDS
1. Purchase Order Record: POs of all materials bought. 2. Vendor Record: List of all vendors & their complete mailing addresses. 3. Blue print and specification record Drawing:- Many items are purchased by blue print specification are kept in separate files with index showing their location and where the copies have been sent. Thus for repeat order to old supplier it is not necessary to send new copies of the specification. 4. Contract file: Certain goods may be bought under a term contract if so, the purchasing department must maintain a record of such contract.
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2. Identification of the supply with full details of material code, date of receipt, suppliers name & truck no: will be carried out and transferred to the pre identified location. Upon receipt of the raw materials GR will be prepared. 3. Based on the GR, Quality assurance will collect the samples as per the pre-determined frequency and OK the material if the results are meeting the requirement by releasing the GR. 4. The materials if rejected from lab will be sent back to supplier and all accepted material will be accounted in the inventory. 5. Issue of raw material will be carried out to internal customers & external customers
Both security and RMS personal shall sign on the computerized weighment slip. One copy of the weighment slip will be filed in RMS along with concerned delivery challan and the second copy will be returned by security department.
management technique used is VED Analysis. Almost all the activities of this department are computerized. The purchase department is initiated whenever re order level is reached. A buffer stock is always maintained in the store. Another system followed in engineering stores is VMI-Vendor Maintain Inventory. In this the vendors supply the raw material in large quantities and payment is made only for consumed items.
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1. Consumables (General stores items) are standard engineering items (bearing, belt, etc). It is decided to identify common codification scheme for all consumable items. All the items shall be brought under this codification scheme. 2. Spares: Spares are part of equipments. Equipments are varying from plant to plant by make and model. It is decided to, 1. Identify common equipments by same make and model. 2. Assign uniform code to equipment make and model wise, which is common across plants. 3. Assign respective plant spares with code of equipment. In general; 1. Item code for consumables will be common across all plants. 2. Item code for spares will be plant specific with respect to common equipment code. However, material classification in SAP will be used to trace the spares to common machines. Material Master Codification will follow the external; numbering.
(b)
the transferring-notes, will be removed to the loading bay and balance will be removed to stores for storage, after completing packing for required item.
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1. Payroll Section
It involves the handling of wages, salaries, keeping records of employees including information about their basic allowances maintaining their attendance etc. for the convenience of employee, payments and dispersed through banks of ATM's. Basic allowances are provided by HR dept. and absenteeism rate are given by time office dept.
2. Costing
The process of costing is based on the financial accounts. The price of a single tyre is determined by taking into consideration the actual cost involved in making tyres. The company follows the rate of having only 0.5 less percentage of scrap and this helps in minimizing cost.
3. Control
It includes monitoring the electricity charges, wastage scrap and other avoidable expenses. Distribution of payment through it is step also taken under this function. This has helped in reducing manpower security requirements and also other risks to be taken by the company. It maintains the maximum inventory of 6-7 days as this is required for again time of tyre. A total 1,32 hours is needed to make a tyre, make it heat resistant, strong, loud etc.
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4. Pricing Pricing is done as per the change in price of raw material and on basis oaf competitors pricing policy.
5. Control excise
All has to pay 16% excise duty for dutiable items of domestic purposes to the central government for exports on excise duty has to be paid at gives about 2.3 crores excise duty in spite of all these measures.
6. Basis of accounting
The financial statements are prepared on historical cost convention with the exception of certain fixed asset which was revalued based on occurred method of accounting and in accordance with the accounting principle generally accepted in internationally.
7. Sources of fund
The major source of funds is from shareholders funds, share capital, reserves and surplus and loans are funds either secured or unsecured. But the unit of Kalamassery receives funds from head office New Delhi.
8. Budgeting
Budgeting is done on the basis of production. Here no sales takes place hence budgeting is done on the basis of production.
9. Applications of funds
Funds are used for purchasing of fixed assets, meeting depreciation, making new investments, purchase of inventories and meeting current liabilities. Apollo Tyres Ltd. of Kalamassery uses its funds for making payments tax payments and purchasing raw material. Rest all the funds are allocated by the head office for other needs and requirements.
Management of accounts receivables Every firm likes to sell its goods or services for cash. But competitive pressure force most firms to sell goods or services on credit. Another motive for selling goods or services on credit is to attract more business. When goods are sod on credit, inventories are reduced, but receivables are created .Receivable constitute on important portion of current asset of several firms.
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Q TECH DEPARTMENT
Q-Tech department is a recently introduced department by merging the technical and quality assurance department.
MANAGER COMPOUNDING
MANUFACTURING MANAGEMENT
CELL MANAGEMENT
SHIFT A
SHIFT B
SHIFT C
TECHNICAL DEPARTMENT
Technical department looks after tyre engineering and related matters and the department has close contracts with production department. Technical department plays a crucial role in the organization.
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Functions
1. To issue specification to the production plant 2. Develop compound Fabric standard 3. Accessories drawing 4. Processing machine specification 5. Processing and curing of new design 6. To inspect all the production activity 7. To test the tyre 8. To stop production if there is any unconformity found during analysis 9. To make appropriate changes in production process and specification if necessary 10. Initiate and implement corrective measure.
Functions
1. Inspection of incoming raw material. 2. Auditing involving the control of non-confirming material or process. 3. Auditing of finished products 4. Solving customer complaints 5. Testing process
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a. Fabric laboratory
The laboratory test all fabric and steel wires received and at all stage of the process.
b. Chemical laboratory
This laboratory carries out test for all polymers, fillers and chemicals.
c. Physical laboratory
All rubber compounds in process are tested in the lab each stage i.e., after mixing in the Banbury, after extrusion and calendaring and after curing.
2. Tyre Testing
Samples of cured tyres are tested indoors on a test wheel. The wheel stimulates the running condition of a tyre/primarily used to detect carcass strength and heat generation. Tyres are fitted on different vehicles to study the effects of different types roads, load and climate.
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For international trade transaction ISO certification has become inevitable. Apollo Tyres Limited got the privilege to have ISO 9001 certification. ISO 9001 covers the quality system and model for QA in design, development, installation and servicing.
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Particulars 2009
Current Assets: Inventories Sundry Debtors Cash & Bank Other Current Assets Loans & Advances 6302.15 2247.35 3620.91 5.33 2053.90
2011
17537.51 9501.80 1908.86 ----3947.67
2010
157.55 350.15 96.38 828.90 115.50
2011
278.28 422.80 52.72 0.00 192.20
Total(A)
14229.64
23703.95
32895.84
100.00
166.58
231.18
Current Liabilities: Current Liability Provisions 5860.44 1141.00 13122.16 2336.92 17127.32 4003.25 100.00 100.00 223.91 204.81 292.25 350.85
Total(B)
7001.44
15459.08
21130.57
100.00
220.79
301.80
Working Capital(A-B)
7228.20
8244.87
11765.27
100.00
114.07
162.77
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NET PROFIT
7 6 Rs Billion 5 4 3 2 1 0 1.4 4.4 6.5
2009
2010
2011
EBIDTA
14 12 Rs Billion 10 10 8 6 4 2 0 4.4 12.8
2009
2010
2011
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2009
2010
2011
NET SALES
100 90 80 70 60 50 40 30 20 10 0 81.2 88.7
Rs Billion
49.8
2009
2010
2011
60
2009
2010
2011
CAPACITY
1600 1400 1200 1000 800 600 400 200 0 1395 1160 950
MT/DAY
2009
2010
2011
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Strengths
1. Apollo Tyres' diversified market base across 3 continents has enabled it to reduce its dependence, and thereby, the inherent risks of banking on a single market, as compared to its Indian competitors. 2. The presence of strong and established brands in the Company's portfolio, in each of its country operations, lends credence to its growth plans. The key brands are Apollo in India, Dunlop in South Africa and Vredestein in Europe. 3. An extensive distribution network supporting Apollo Tyres' brands and products in all its 3 key operations. 4. Continued leadership position in the commercial vehicle tyre segment in India, including price leadership in the cross ply segment. 5. A leading position in the fast-growing passenger car tyre segment in India, reaching the #1 position in production and #2 in market share. 6. Strong player in the ultra high performance (UHP) passenger car tyre segment in Europe, particularly in high margin winter tyres. 7. Dynamic and progressive leadership.
Weakness
1. Absence in the two-wheeler and three-wheeler tyre segment in India, which is large and continues to show good growth. 2. Sub-optimal production facilities in terms of economic size in South Africa. 3. Market dynamics and intense competition in some key markets do not allow passing on cost pressures as and when reasonably required.
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Opportunities
1. Apollo Tyres' enjoys an early mover advantage, with a large production capacity in the rapidly growing truck-bus radial segment in India, well ahead of key competitors. 2. Entry into truck-bus radial retreading segment in India, by further leveraging its leadership position in the commercial segment this enables the Company to provide a complete solution to its customers and thus, enhance its brand equity. 3. Cultivating a sizable market for brand Apollo in Europe by capitalising on the existing European distribution network. This further improves brand recognition and enhances profitability. 4. Increased sales of brand Vredestein tyres by providing competitive cost production base out of India and/or sourcing tyres from other players. 5. Entry into the off-highway tyre segment in India. 6. Introduction of truck-bus and off-highway tyres in Europe. 7. Penetrating newer markets in Africa, including tapping into the potential of the Dunlop brand. 8. Entry into high potential markets like South America, Australia and Eastern Europe.
Threats
1. Potential growth slowdown in the Indian economy due to rising interest rates. 2. Increased competition from global players like Michelin and Bridgestone as they enter the truck bus radial segment in India. 3. Degrowth in the truck cross ply segment faster than anticipated. 4. Extreme raw material price volatility and cost pressures. 5. Exposure to the South African market which continues to face both a country and currency risk. 6. Economic downturn in Europe leading to decline in demand.
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FINDINGS
ATL is the first tyre company to receive ISO 9001 certification and one the few tyre manufactures to obtain QS 9000 certification. Workers health and safety are given prime importance A good co-ordination exists between different departments. Trade unions play vital role as bargaining agents. The management is sometimes forced to accept demands made by the unions. The products of the company are known for its high quality standards. The workers are not completely satisfied with the wages they are paid. Employees are provided with facilities such as subsidized canteen, transportation etc. Safety posters and slogans are exhibited inside the plant and various safety awareness programs are also conducted. The factory premises are kept clean which comes under a dedicated system known as Environment Management System (EMS) Factory is located at an ideal location that allows easy access to land, air and sea transportation. All departments at the plant are being connected through SAP which gives real time connectivity with each other. All the plants of Apollo tyre group are being connected with the headquarters through WAN and SAP which critical decision making easy
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CONCLUSION
Apollo tyres Ltd is the 7th fastest growing tyre company in the world. A fair wage system prevails in ATL. The company provides better working condition for employees. Proper training to workers and efficiency of the workers must be increase to increase production. The industrial relation with the local union is fairly good and satisfactory at Apollo Tyres Ltd., Kalamassery unit.
The Company is facing a cut throat competition in Indian market and international market. Despite of all these challengers Apollo has done well in the past and with a booming economy and a focused progressive leadership at the top. The employees enjoy working as a team and with customers to create superior and distinct production and services. Apollo is focused on fast and flexible, never ending improvement in order to create an enterprise that is dynamic, ever expanding and profitable and in constant pursuit of customer satisfaction is Apollo policy to design, manufacture and service our products to provide the level of quality and value that meets ever customer needs.
Apollo stands first in the production of truck tyres. In spite of recession the company is still making sufficient profit. There are good working conditions and industrial harmony among the employees. Proper and adequate training is given to the employees, which leads to higher productivity,. The company is facing cut throat competition from Indian market as well as foreign market. In spite of fierce competition and local problems the Kalamassery plant thrives and move forward to its target of 310 MT/day and thereby achieve their 9000 crore goals by the end of 2010. Apollo tyres boast a vibrant and dynamic, profession and non hierarchical culture. Transparency and communication are cornerstones of corporate practice, across levels, to ensure that each individual employee is aligned with the goals and aspiration of the company. At Apollo Tyres the three corporate pillars of People, Quality and Technology underpin all activities and processes. These are the companys stated areas of corporate excellence, in its journey towards becoming a best in class global manufacturer.
Apollo Tyres, they are always looking out for new opportunities. If opportunities do not come their way, they go ahead and create opportunities. Over the years they have created opportunities for growth, opportunities for success and also opportunities for a bright future.
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SUGGESTIONS
Maintain the relationship between employees and employers There should be training program for better understanding of SAP A bit more promotional activities could enhance building brand image Maintain a healthy relationship with trade unions More training facilities must be given to employees The company should enter into two/three wheeler markets. The company should invest more on advertisement. Each should have an in house marketing department that can take care of the
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